GIFT   OF 


« 


THE  PRINCIPLES  OF 
TRADE  GO-OPERATION 


CHART  OF  TRADE  CO-OPERATION 


I  Individual  |    |  Individual  |   j  Individual  j   |  Individual] 


GOOD-FELLOWSHIP 

(Organization) 


COMPREHENSION 

(Education — Information) 


UNIFORMITY 

(Trade  Opinion) 


HARMONY 

(Community  Interest) 


VOLITION 

(Teamwork) 


Ethics      {     [  Methods  [     [  Systems  |          Technics 


COMMUNITY  EFFICIENCY 

(Trade  Progress) 


THE   PRINCIPLES  OF 
TRADE  CO-OPERATION 

By  R.  H.  BENNETT 


"Co-operation  is  the  Watchword  of 
Our  Day  —  Co-operation  among 
Business  Men,  Co-operation  between 
Employer  and  Employe,  Co-operation 
between  Business  and  Government" 
"Awakening  of  Butiness"  by  E.  N.  HURLEY 


THE  TRADE-LETTER 

SAN  FRANCISCO 


COPYRIGHT,  1918 
By  R.  H.  RENNETT 

H  1 6  *  Market  Street 
San  Francisco 


TO  THE  AWAKENING  BUSINESS  MAN 

THIS  WORK  IS  HOPEFULLY 

DEDICATED 


888345 


A  commercial  organization  philosophy, 
clearly  defined  principles,  recognized  standard 
methods  of  procedure,  absence  of  trial  and  error 
of  experience,  method  of  learning  rudiments  and 
specialized  preparation — (not  necessarily,  but 
increasingly  academic) — must  constitute  the 
basis  of  efficiency  in  commercial,  industrial  and 
civic  development  of  American  communities. 

Prof.  ALFRED  L.  SMITH  of  Dartmouth  College. 

It  (business)  is  not  now  a  frontier  of  axe  and 
plow,  nor  of  engines  and  machinery,  but  of 
Principles  and  Policies. 

To  make  education  effective,  we  must  estab- 
lish the  principles  and  policies  which  are  to  be 
mastered,  so  that  training  may  form  the  mind  of 
the  executive  more  certainly,  more  rapidly  than 
unregulated  experience  can  do. 

Prof.  E.  D.  JONES,  University  of  Michigan. 


PREFACE 

THE  most  urgent  need  of  the  times  is  a  revision 
of  the  code  of  business  ethics  with  community 
welfare  as  the  point  of  attainment.  Economic 
necessity,  in  fact,  decrees  such  revision. 

The  age  demands  efficiency  which  cannot  be 
attained  under  the  unbridled  competition  now 
existing  in  the  trade  community. 

Competition  must  be  dethroned  as  the  dom- 
inating factor  in  business  affairs  and  selfish 
individualism  in  business  must  go  with  it. 

Trade  development  along  lines  of  stability, 
efficiency  and  progress,  calls  for  co-operation — 
some  true  system  of  co-operation — in  which  the 
principles  and  facts  invoked  may  be  understood 
and  business  men  inspired  to  curb  the  evils  of 
unrestricted  competition. 

Effective  co-operation  has  been  lacking  in 
business  because,  first,  of  the  absence  of  known 
and  accepted  fundamentals  and,  second,  of  the 
lack  of  some  comprehensive  educational  system. 

It  is  therefore  the  purpose  of  this  work  to 
set  forth  the  fundamentals  of  trade  co-operation 
and  define  the  lines  of  the  needful  education,  so 
necessary  to  impress  upon  the  business  man's 

[v]" 


PREFACE 

conviction,  if  he  is  to  emancipate  himself  and 
his  trade  from  the  traditional  competitive  dom- 
ination and  eventually  gratify  his  aspirations 
to  elevate  his  business  to  the  plane  of  efficiency 
and  to  the  standard  of  morality  to  which  it  is 
entitled. 

I  therefore  submit  to  the  business  man  "The 
Principles  of  Trade  Go-operaiion"  which  rep- 
resents the  cumulative  result  of  many  years  of 
striving  in  the  cause  of  trade  co-operation,  with 
the  sincere  hope  that  it  may  prove  successful  in 
its  purpose. 

R.  H.  BENNETT. 


[vi] 


CONTENTS 

PART  I 
INTRODUCTORY 

Page 

All  arguments  are  in  favor  of  co-operation     .  .  .3 

Trade  organization   ......  4 

The  matter  of  education  .  .  .  .  .5 

The  groundwork       ......  7 

The  Trade  Secretary 8 

The  urgent  necessity  .....  9 

PART  II 

THEORY,  PRACTICE  AND  EDUCATION  OF 
TRADE  CO-OPERATION 

The  theory  of  co-operation       .           .           .           .  .13 

The  practice  .......  17 

The  education     .           .           .           .           .           .  .22 

General  argument     ......  26 


PART  III 
TRADE  CO-OPERATION 

Its  rudiments  and  philosophy  .  .  .  .  .33 


Business         .  .  .  .  .  .  .33 

Competition        .           .           .           .           .           .  .83 

Co-operation .......  34 

Modification  of  competition      .           .           .           .  .35 

Effect  upon  results  from  business  ....  35 

II 

The  Trade  Association  .           .           .           .           .  .36 

Does  it  lessen  competition?            ....  36 

Does  it  impose  obligations?      .           .           .           .  .37 

[  vii  ] 


CONTENTS 

Page 
Does  it  compel  obedience?  ..... 

Majority  rule       .  .  .  .  .  .  .37 

Trade  opinion  ......  38 

Objects  attained 38 


III 

Price 39 

Can  co-operation  control  price?           .            .  .            .39 

Does  co-operation  lessen  price  competition?  .           .           40 


IV 

The  obstacle 41 

What  is  the  matter  with  the  business  man?        .           .  41 

Can  obstacles  be  overcome?      .           .           .           .  .41 

Is  it  possible  and  practical?            ....  42 

How  can  good-fellowship  be  induced?             .            .  .42 

Does  co-operation  introduce  the  Golden  Rule?   .           .  42 


Economic  law     .           .           .           .           .           .  .43 

What  causes  the  economic  changes?         ...  43 

The  effect  of  economic  changes            .           .           .  .44 

VI 

The  law  and  trade  co-operation     ....  44 

The  Sherman  Anti-Trust  law 45 

The  Clayton  law       ...           .           .           .  45 

The  Federal  Trade  Commission  law    .           .           .  .45 

View  of  the  Federal  Trade  Commission               .           .  45 

View  of  the  Administration  46 


VII 

The  advantages  of  trade  co-operation  and  association     .  46 

What  education  is  necessary?    .           .           .           .  .47 

How  is  it  to  be  obtained?    .....  48 


VIII 

The  summary      .  .  .  .  .  .  .     49 


[viii] 


CONTENTS 

PART  IV 

THE  ESSENTIAL  PRINCIPLES  OF  TRADE 
GO-OPERATION 

Good-fellowship:  Page 

Courtesy  and  cordiality           ....  63 

Frank  and  open  discussion            .            .            .  .63 

Fair  dealing       ......  63 

Comprehension: 

The  necessity  for  co-operation      .  .     64 

Co-operative  principles            .  65 

Trade  conditions     .            .  .     65 

Competitive  conditions            ....  65 

Economic  conditions           .            .            .            .  .65 

False  theories 66 

The  law        .  .     66 

Uniformity: 

Standardization  of  methods    .            .            .            .  67 

Technical  standards           .            .            .            .  .67 
System    .                       ...                       .68 

Harmony: 

Functional  relations           .            .            .            .  .69 

Trade  distribution         .....  69 

Ethics — Moral  principles  .            .            .            .  .70 

Volition: 

Teamwork 71 

Conduct 72 

Self-control         .  72 

The  argument: 

The  democracy  of  business           .            .            .  .73 

The  first  principle         .....  77 

The  second  principle          .            .            .            .  .80 

The  third  principle       .....  83 

The  fourth  principle            .            .           .            .  .85 

The  fifth  principle  87 

PART  V 
COMMENTARY 

The  transition  of  business   .....  93 

The  business  man            .            .            .            .            .  .94 

Economic  conditions            .....  97 

Political  conditions         .            .            .            .           .  .100 

Legal  conditions  .  .  .  .  .102 

Conclusion  .    105 


[ix] 


PART  I 
INTRODUCTORY 


Ideas  are  to  be  found  on  every  hand  in  Ameri- 
can business — admirable  ideas  but  isolated, 
each  known  to  only  a  handful.  For  while  the 
peaks  of  efficiency  are  high  in  this  country,  the 
valleys  of  inefficiency  are  notoriously  low  and 
wide.  What  is  needed  on  behalf  of  common 
progress  is  to  put  the  elements  of  efficiency,  now 

known  only  to  the  few,  into  the  hands  of  the  many. 

*     *     *     * 

The  wasteful  individualism  in  business,  each 
concern  hewing  its  way  alone  with  little  aid  or 
counsel  from  the  rest,  is  undoubtedly  due  to  no 
set  opposition  to  co-operation  but  rather  to  the 
lack  of  an  adequate  agency  to  stimulate  it. 
A.  W.  SHAW. 


INTRODUCTORY 

Trade  co-operation  has  every  argument  in  Opening 
its  favor — save  perhaps  one.  Personal  incom- 
patibility  is  that  exception,  and  experience 
shows  that  with  the  proper  education  of  a 
community  in  the  essential  principles  of  co- 
operation, even  that  possible  exception  may 
be  overcome. 

Economic  necessity,  science,  morals,  ex- 
perience and  common  sense  all  sustain  the 
argument  for  the  application  of  co-operation 
to  business. 

It  is  logical,  with  the  continually  increas- 
ing complexity  in  economic  conditions,  that 
the  policy  of  "each  for  himself"  (individ- 
ualism) must  needs  end  disastrously  for  all. 

It  is  reasonable,  where  such  complexity  of 
conditions  exist,  that  some  scientific  basis  is 
necessary  to  furnish  the  comprehensive  solu- 
tion. 

It  is  manifest,  if  the  standard  of  business, 
demonstrated  now  by  unmoral  competitive 
strife,  is  to  be  elevated  to  a  plane  commen- 
surate with  the  times,  that  co-operation  is 
the  necessary  foundation. 

[3] 


INTRODUCTORY 

It  is  rationally  certain  that  the  experience 
of  mankind  in  obtaining  results  from  co- 
operative work  in  every  one  of  its  other  com- 
munity affairs,  dictates  the  application  of 
co-operation  to  business  also. 

And  is  it  not  plain  common  sense  that  more 
could  be  accomplished  for  each  individual's 
welfare,  were  the  experiences,  the  brains,  the 
energy  of  all  interested  individuals  concen- 
trated upon  a  given  purpose,  co-ordinated  in 
the  reciprocal  policy  of  "one  for  all  and  all  for 
one,"  than  where  each  takes  his  chance  in  the 
competitive  scramble  ? 

The  question,  then,  is  not  why  trade  should 
co-operate,  but  how! 

The  Trade        Trade  Associations  which  are  organized 
Association  for  ^Q  purpose  of  co-operation  are  of  two 
classes,  national  and  local. 

A  national  association  (assisted  perhaps  by 
a  state  organization)  operates  for  the  welfare 
of  the  trade  at  large,  while  the  local  association, 
as  the  designation  indicates,  operates  in  the 
interest  of  a  local  community. 

In  a  national  association  the  broader 
principles  and  policies  which  should  govern 
the  trade  are  formulated  and  announced, 
standards  are  established  for  guidance  and 

[4] 


INTRODUCTORY 

uniformity  of  usage,  and  the  interests  of  the 
entire  trade  unified,  advocated  and  protected 
by  national  representation. 

In  the  local  organization,  not  only  are 
the  principles  as  announced  by  the  national 
association  accepted  and  its  standards 
adopted,  but  they  are  here  to  be  applied  and 
placed  in  practical  operation. 

The  national  association  can  treat  of  the 
solution  of  trade  problems  only  in  the  abstract, 
without  reference  to  local  conditions  or  per- 
sonalities, while  local  organizations  have  not 
only  to  deal  with  the  concrete  questions  but 
also  with  personal  pecularities. 

It  is  the  local  particularly  to  which  our 
arguments  are  directed,  for  it  is  to  solve  the 
problem  of  the  practical  adaptation  of  co- 
operative principles  which  is  our  object,  and 
while  of  course  the  principles  must  apply 
equally  to  the  broader  co-operation  of  the 
national,  it  is  only  within  the  local  where  we 
meet  the  vital  issues  face  to  face. 

The  question  of  effective  co-operation  is  Education 
purely  a  matter  of  education,  the  community 
problem  of — how  to  effectively  instruct  and 
drill  its  individuals. 

There  is  a  lack  of  mutual  understanding 

[5] 


INTRODUCTORY 

amongst  men,  a  lack  of  comprehension  of 
facts,  a  lack  of  adequate  information  regarding 
the  personal,  moral  and  economic  elements  in 
business. 

Business  must  be  reformed  from  its  scram- 
bling competitive  methods,  to  an  equitable 
system  of  co-operation.  Its  sordid,  grasping, 
disorderly  strife  must  be  replaced  by  an  orderly 
system  embracing  the  principles  of  the 
equality  of  opportunity,  community  progress 
and  common  welfare,  and  the  rule  of  thumb 
must  give  way  to  exact  methods. 

System  Unquestionably  the  solution  to  such  a 
problem  lies  only  in  a  proper  system  of  educa- 
tion. To  be  effective,  such  a  system  must  pre- 
sent to  its  students  a  substantial  foundation, 
and  outline  to  them  such  a  clear  comprehen- 
sive plan  of  superstructure  that  the  perspec- 
tive of  the  results  to  be  attained  may  be 
plainly  convincing;  for  the  business  man  is 
skeptical  of  theories  and,  while  knowing 
the  practical  side  of  his  business  and  its 
needs,  he  is  deeply  imbedded  in  the  rut  of 
habit. 

Any  education  undertaken  must  be  a  post- 
education  which  will  result  in  a  re-educating 
process  which  will  discard  old  methods  only  as 

[6] 


INTRODUCTORY 

the  new  demonstrate  that  they  will  stand  the 
test. 

Therefore,  only  a  system  which  is  based 
upon  practical  principles  and  plain  funda- 
mentals is  possible  of  success. 

The  Principles  of  Trade  Go-operation  as  The 
set  forth  in  this  work  constitute  the  ground-  Groundwork 
work  for  the  development  of  practical  co- 
operation. 

These  principles,  together  with  the  philoso- 
phy and  the  rudiments  of  the  subject,  are 
concisely  stated.  In  fact,  the  context  has  been 
confined  to  essentials.  Everything,  including 
explanations,  arguments  and  illustrations  not 
necessary  to  the  clarity  of  the  subject,  has 
been  omitted  in  order  that  the  business  man 
may  more  readily  scan  its  simple  scope. 

The  work  is  and  can  be  only  elementary 
inasmuch  as  the  matter  of  business  is  a  very 
deep  and  broad  subject  and  one  which  must 
be  treated  minutely  and  exhaustively  to 
properly  cover  the  requirements  of  each  de- 
tail. 

The  seeming  reiteration  herein  of  certain 
statements  is  for  the  purpose  of  emphasizing 
their  importance  and  to  impress  upon  the 
reader  their  invariable  necessity  to  the  subject. 

[7] 


INTRODUCTORY 

The  object  of  the  work  is  to  submit  in  an 
orderly  and  logical  manner  the  essentials  of 
co-operation  so  as  to  prepare  the  business  man 
for  some  system  of  community  education  sup- 
plementary to  this  elementary  knowledge. 

Without  the  groundwork  here  presented 
such  education  would  be  fragmentary,  in- 
coherent and  consequently  lacking  in  effect- 
iveness. 

The  Trade        While  he  is  not  specifically  mentioned  in 
Secretary  ^e  work,  it  is  due  to  the  Trade  Secretary  to 
say  that  his  professional  services  are  indispen- 
sable to  any  organization  for  successful  accom- 
plishment of  co-operation. 

The  secretary  represents  the  embodiment 
of  a  trade  community,  while  lending  to  it  his 
personality.  He  is  largely  responsible  for 
successful  co-operation  as  an  interested,  im- 
partial arbiter  and  executive,  whose  single 
purpose  is  the  community  interest.  As  he  is 
an  adviser  or  counselor  only,  his  authority 
cannot  be  commensurate  with  his  responsi- 
bility, for  it  is  impossible  in  voluntary  co- 
operation to  delegate  to  him  any  authority  to 
compel.  If  his  constituents  are  loyal  to  com- 
munity interest  and  obedient  to  the  decrees 
of  their  trade  opinion,  he  is  enabled  to  guide 

[8] 


INTRODUCTORY 

them  very  readily  into  effective  teamwork. 
If,  however,  any  of  them  exhibit  traits  of 
individual  incompatibility  which  render  co- 
operation ineffective,  he  is  helpless  beyond  his 
ability  to  persuade  or  convince. 

Therefore,  he  will  appreciate  the  help  and 
added  influence  which  a  definite  knowledge 
of  orderly  principles  of  co-operation,  upon 
the  part  of  his  constituents,  will  undoubtedly 
have  upon  his  efforts  in  promoting  harmony 
and  the  progressive  development  of  his 
trade  community.  The  moral  support  of  ac- 
cepted principles  will  greatly  help  to  reconcile 
the  gap  between  his  responsibility  and  his 
authority. 

If  the  world  is  to  be  "safe  for  democracy"  The  Urgent 
from  autocratic  rule,  so  must  the  democracy  Necessiiy 
of  business  be  made  secure  from  the  rule  of 
paternalism,  socialism  and  plutocracy. 

Business  is  in  jeopardy  from  one  and  all  of 
these  dangers — government  control,  govern- 
ment ownership  and  the  power  of  concentrated 
wealth. 

The  welfare  of  the  Nation  is  best  preserved 
and  its  democracy  made  secure  only  where  in- 
dependent units  prosper,  and  this  will  be  im- 
possible under  any  domination  which  will  not 

[9] 


INTRODUCTORY 

give  full  sway  to  the  freedom  and  equality  of 
individual  opportunity  in  business. 

Underlying  This  does  not  and  cannot  mean  unlimited 
Cause  competitive  freedom  (a  false  theory),  which 
tends  to  that  waste  and  destruction  which  is 
the  underlying  cause  for  the  tendencies  to- 
ward governmental  control.  It  does,  however, 
require  that  business  must  be  characterized 
by  community  interest,  efficiency  and  economy 
if  it  is  to  be  effective  in  producing  the  best  re- 
sults for  its  individuals  and  for  the  public. 

Individualism  in  business  like  autocracy 
has  reached  its  end,  but  democracy  in  busi- 
ness like  the  democracy  of  a  nation  must  be 
effective  if  it  is  to  be  enduring.  If  not,  it  is 
bound  to  lead  on  to  anarchy  and  eventually 
back  to  autocracy. 

Paramount  Community  efficiency  is  the  paramount 
issue  jssue)  an(j  community  efficiency  can  be  at- 
tained only  through  co-operative  effort  made 
effective  by  individual  obedience  to  its  fun- 
damental laws,  for  the  citizen  of  a  trade  com- 
munity like  a  citizen  of  a  democracy  must  be 
both  informed  and  obedient. 

"The  hope  of  democracy  lies  in  education." 

[10  ] 


PART  II 
THEORY,  PRACTICE  AND  EDUCATION 


"The  desire  for  organized  efficiency  has  always 
been  particularly  strong  in  Americans,  and 
possibly  no  other  people  has  ever  carried  organi- 
zation and  efficiency  in  an  individualistic 
sense  farther  than  have  we.  Now  it  is  rapidly 
dawning  upon  the  cleverest  thinking  of  our 
citizens  that  there  is  still  a  higher  kind  of  effi- 
ciency than  that  of  competitive  individualism, 
namely,  the  efficiency  of  properly  devised  and 
safeguarded  co-operation.1' 

ELBERT  F.  GARY. 


I.   TRADE  CO-OPERATION 

THE  THEORY — The  theory  of  co-operation  The  Theory 

1  is  based  upon  the  evident  fact  that  "two  heads 
are  better  than  one"  where  both  are  working  to 
the  same  end;  and  this  fact  is  confirmed  by  the 
law  of  self-preservation  which  dictates  that 
when  the  effort  of  a  single  individual  fails  to 
produce  the  desired  result,  his  next  move  is 
to  seek  the  help  of  another  or  others  whose 
purpose  is  the  same  as  his  own. 

This  theory,  as  applied  to  trade  co-opera- 
tion, works  upon  the  hypothesis  that  as  man 
has  made  great  progress  by  co-operative  work 
in  many  things,  it  is  logical  that  he  can  also 
make  progress  by  co-operation  in  business. 

And  the  theory  upon  a  further  hypothesis 
assumes:  that  the  individuals  working  to- 
gether are  inspired  by  a  common  purpose,  that 
they  are  friendly,  that  they  possess  a  common 
intelligence  of  their  business  and  of  their  pur- 
pose,  and  that  each  will  direct  his  action  to 
accord  with  that  intelligence. 

THE  theory  of  co-operation,  as  applicable  to 
trade,  does  not  require  much  argument  to 
sustain  its  desirability.  Its  necessity,  too,  is 
very  evident.  There  is  not  a  trade,  business 
or  vocation  within  the  scope  of  the  industries, 
of  commerce,  of  transportation,  of  finance,  or 


TRADE     GO-OPERATION 

of  the  professions  which  will  not  attest  to  the 
necessity  and  to  the  benefit  to  be  derived  from 
the  organization  of  its  co-operating  units. 

It  is  not  a  question,  then,  of  necessity,  but 
of  means  to  effectively  accomplish  the  co- 
operation. 

Unorganized  business  is  in  the  identical 
position  of  a  mob  without  order  or  discipline. 
It  is  incapable  to  cope  with  any  organized 
efficiency,  no  matter  how  much  less  in  num- 
ber or  in  justness  of  cause  such  opposition 
may  be.  It  is  organization  alone  which  gives 
unity  and  an  opportunity  to  gather  strength, 
knowledge  and  efficiency.  It  is  organization 
alone  which  can  accomplish  results,  but  only 
by  proper  co-operative  work,  that  is,  through 
the  co-ordinating  teamwork  of  its  individuals. 

Compared        Our  own  Federal  Government  affords  the 
Wlih,  best  example  of  applied  co-operation.    Forty- 

Government      .  j-    j  •      +•          •   ij 

eight  free  and  independent  sovereignties  yield, 
for  the  "community  of  interest,"  some  portion 
of  their  inherent  rights  to  the  centralized 
National  Government,  rights  which  other- 
wise would  interfere  and  clash. 

Public  welfare  is  the  object  of  this  co- 
operation and  in  that  welfare  each  State 
acknowledges  its  own  beneficent  interest. 


TRADE     CO-OPERATION 

Public  welfare,  by  which  is  inferred  that 
the  common  rights  of  individuals  are  pro- 
tected, is  the  object  of  government  and  public 
opinion  is  its  determining  influence.  In  like 
manner,  trade  welfare,  which  implies  that  the 
common  interests  of  individuals  are  equitably 
protected,  is  the  object  of  organization  and 
trade  opinion  must  be  its  directing  influence. 
Trade  opinion  and  public  opinion  differ  only 
in  degree,  the  one  entitled  to  the  willing 
obedience  of  the  business  man  equally  as  law- 
abiding  citizens  loyally  yield  to  the  other. 

Friendliness,  knowledge  or  comprehension,  Requisites 
and  obedience,  are  the  requisites  of  both  these 
democracies — National  and  Trade.  Govern- 
ment, however,  has  authority  to  enforce  obe- 
dience to  the  public  opinion,  which  is  crystal- 
lized into  law,  while  trade  organization  has  no 
such  authority  to  enforce  obedience  to  trade 
opinion.  The  only  force  which  can  be  exerted 
is  the  moral  influence  of  that  trade  opinion, 
i.  e.  trade  ethics.  The  more  necessary,  there- 
fore, is  it  that  the  business  man  be  learned  in 
the  necessities  of  his  trade  community  that  he 
may  see  therein  his  own  interests  and  more 
willingly  obey  the  decrees  of  his  trade  opinion. 

As  a  government  demands  some  individual 


TRADE    CO-OPERATION 

sacrifice  to  the  public  welfare — the  common 
interest  of  its  citizens — as  it  enacts  public 
opinion  into  law,  and  as  it  requires  every 
citizen  to  obey  that  law,  so  should  a  trade 
Voluntary  organization  of  co-operating  individuals  expect 
obedience  jtg  mem]3ers  ^o  yield  their  contrary  personal 
advantage  to  the  community  welfare,  in 
which  each  has  an  indivisible  interest.  As 
Trade  Opinion  is  the  valid  substitute  for 
community  law,  it  is  presumed  that  the  self- 
interest  of  the  individual  will  cause  him 
voluntarily  to  obey  that  law. 


[16] 


II — THE  PRACTICE 

Co-operation  to  be  successful  requires  that  The  Practice 

the  working  hypothesis  of  a  community  object, 
of  mutual  friendliness,  of  common  knowledge, 
and  of  voluntary  individual  action  be  made 
facts. 

As  co-operation  means  the  co-ordinating 
work  of  individuals,  the  success  of  practical  co- 
operation depends  first,  last  and  always  upon 
individual  volition. 

Each  member  of  a  co-operating  body  is  re- 
sponsible to  his  colleagues  (as  to  his  own 
interest)  for  the  proper  performance  of  his  part. 
An  imperfect  link  determines  the  strength  of  the 
chain. 

This  responsibility  implies  the  necessity  of 
willing  effort  upon  the  part  of  the  individual  to 
the  extent  of  self-sacrifice.  Self-discipline  there- 
fore should  be  an  accomplishment  of  every 
member. 

Hence,  the  conditions  for  practical  trade  co- 
operation demand:  That  there  is  a  community 
interest  in  the  purpose,  that  good-fellowship 
exist  between  and  among  the  members  of  a  trade 
organization,  that  a  ready  willingness  to  impart 
and  acquire  requisite  knowledge  be  the  attitude 
of  all,  and  that  voluntary  obedience  be  given  to 
the  decrees  of  community  opinion.  Such  will 
procure  that  effective  teamwork  through  which 
alone  is  the  purpose  in  view  obtainable. 


[17] 


TRADE     CO-OPERATION 

It  may  readily  be  seen  that  the  conditions 
necessary  to  obtain  co-operative  results  are 
not  easy.  The  human  will  is  often  divided 
by  conflicting  opinions  which  interfere  with 
that  unison  of  effort  which  community  interest 
is  supposed  to  inspire.  Business  men  also  are 
overcome  by  conservatism,  careless  com- 
placency or  by  competitive  habits.  There- 
fore, unless  the  individual  willingly  lends  his 
earnest  effort  to  correct  these  traits  within 
himself,  they  are  bound  to  obstruct  the  pur- 
pose in  view. 

Obstacles  The  American  business  man  as  he  is  at 
present  mentally  equipped  and  competitively 
trained,  is  not  in  shape  for  immediate  prac- 
tical co-operative  work. 

To  be  "brutally"  plain:  If  he  is  self- 
satisfied  by  reason  of  his  past  independent 
success,  or  is  skeptical  either  of  his  neighbor's 
ability  or  honesty,  so  that  he  cannot  or  will 
not  stoop  to  the  common  necessity,  and  drill 
with  his  competitors  in  learning  his  "hay 
foot"  from  his  "straw  foot"  in  the  rudiments 
of  co-operation,  he  is  unfit! 

One  of  the  greatest  obstacles  to  the  prac- 
tice of  co-operation,  apart  from  inherent 
narrowness,  is  apt  to  be  the  "big  house"  whose 

[18] 


TRADE     CO-OPERATION 

importance  is  magnified  in  its  own  estimation, 
considering  beyond  argument  that  its  prom- 
inence, its  judgment,  its  knowledge,  its  analy- 
sis of  situations  are  so  superior  that  it  "cannot 
be  wrong"!  Or  a  selfish  interest  in  its  prom- 
inence will  not  permit  of  yielding  to  com- 
munity opinion  for  fear  that  equity  may 
destroy  its  prestige. 

It  is  an  indispensable  condition  to  practical 
teamwork  that  every  one  in  the  team,  be  he 
big  or  little,  broad  or  narrow,  must  first  learn 
the  lesson  of  humility  in  the  fact  that  his  house, 
no  matter  how  large,  is  only  a  "unit"  in  the 
trade  community  and  as  such  it  must  be  sub- 
servient to  the  opinion  of  that  community. 

In  practice,  co-operation  means  teamwork,  Teamwork 
and  teamwork  implies  the  knowledge  of  his 
part  by  every  member  of  the  team  and  his 
application  of  that  knowledge  to  actual  prac- 
tice. It  is  the  principle  which  is  applied  to 
military  service,  to  baseball  and  football  and 
any  other  affair  of  man  which  calls  for  co- 
operation. Teamwork  is  an  indispensable 
necessity  to  successful  co-operation. 

Before  teamwork  can  be  made  effective, 
however,  it  is  evident  that  the  individual  must 
be  educated  and  trained  and  that  he  must 


TRADE     CO-OPERATION 

assume  a  willing  responsibility  for  his  part. 
As  much  of  this  education  is  reciprocal,  it  is 
bound  to  bring  into  play  conflicting  opinions. 
Where  the  common  object  is  lost  sight  of  in 
this  conflict  of  opinions,  the  greatest  danger  to 
co-operation  lies.  It  is  natural  that  men's 
opinions  should  ofttimes  be  incompatible,  so 
it  is  imperative  that  the  policy  of  "give  and 
take"  should  always  be  uppermost  in  mind. 

Correct  This  policy  of  "give  and  take"  insures  the 
Policy  average  of  equality,  and  every  unit,  whose 
opinion  is  but  a  fraction  of  the  whole,  should 
be  content  in  that  he  will  receive  his  fair  pro- 
portion of  consideration  in  the  welfare  of  the 
whole. 

The  The  effect  of  co-operative  training  is  to 
elevate  the  plane  of  business  conduct,  setting 
a  higher  mark  for  both  moral  and  technical 
standards,  so  that  the  individual  units  grad- 
ually develop  a  voluntary  desire  to  meet  these 
standards. 

When  this  voluntary  desire  becomes  the 
rule  of  action,  then  will  teamwork  dem- 
onstrate the  effectiveness  of  co-operation. 

Effective  co-operation  cannot  fail  to  estab- 
lish a  business  upon  a  scientific  basis,  which 

[20] 


TRADE     CO-OPERATION 

means  simply  the  application  of  economic  The 
knowledge  to  the  community  understanding,  Effeci 
of  moral  ethics  to  business  conduct,  of  effi- 
ciency to  methods  and  of  co-operation  to 
friendly  intercourse. 


III.    THE  EDUCATION 

The  The  business  man  then  must  approach  trade 

Education  co-operation  with  an  open  mind.  He  must  be  a 

student  for  a  time  while  he  learns  the  rudiments 
of  a  new  course  in  business. 

This  education  involves  a  reconstruction  of 
principles,  policies  and  methods  in  business 
along  lines  totally  different  from  those  under 
competition  in  which  all  business  men  have  been 
trained. 

It  will  involve  the  unlearning  of  old  ways- 
while  replacing  them  with  the  new.  It  will 
mean  the  acquiring  of  a  thorough  understanding 
of  trade  affairs  and  of  all  conditions  pertaining 
to  them.  It  will  eliminate  all  secrecy,  all  per- 
sonal advantages,  and  necessitate  personal 
training  in  self-control  to  eliminate  selfish  de- 
fects as  a  parallel  accomplishment  to  the  knowl- 
edge acquired. 

Such  education  cannot  be  acquired  in  a  day, 
a  month  or  perhaps  a  year.  It  must  proceed 
„,  step  by  step,  for  to  short-cut  is  to  stumble. 

The  technical  and  scientific  application  of 
this  education  while  a  community  requirement 
must  be  applied  by  individual  initiative. 

To  accomplish  such  education  effectively 
requires  a  system  of  educational  training  as  an 
indispensable  prerequisite. 

The  business  man  must  realize  that  co- 
operation is  not  a  matter  of  rapid  accomplish- 
ment, but  of  steady  acquirement.  It  is  not  a 


TRADE     GO-OPERATION 

method  to  be  applied,  but  a  system  to  be  de- 
veloped. It  is  not  a  lesson  to  be  passively 
absorbed,  but  actively  learned  by  close  per- 
sonal application. 

The  reform  of  business  conduct  requires 
not  only  education,  but  training  in  teamwork, 
and  this  demands  diligence,  patience  and 
forbearance. 

The  business  man  must  know  that  any 
individual  action  contrary  to  trade  usage  or 
opinion  imposes  upon  the  trade  community  a 
changed  condition.  This  change  is  bound  to 
intensify  competitive  strife,  and  disturb  uni- 
formity of  method,  which  increases  unneces- 
sarily both  expense  and  effort — pure  waste. 

The  license  of  individual  right  to  impose 
upon  community  harmony  in  adopting  revolu- 
tionary measures,  whether  from  ignorance, 
spite  or  bullheadedness,  is  unfortunately 
sanctioned  by  our  laws,  provided  only  that 
such  measures  do  not  constitute  unfair  com- 
petition. 

It  was  stated  in  the  foregoing  chapter  that  Reciprocal 
much  of  the  education  necessary  to  co-opera-  Insiructwns 
tive  work  is  "reciprocal."    It  is  this  reciprocal 
education  which  is  vital  to  trade  progress  and 
is  practically   impossible   under   open   com- 


TRADE     CO-OPERATION 

petition.  Reciprocal,  as  the  word  implies, 
necessitates  an  interchange  of  trade  infor- 
mation. Without  such  reciprocity, — com- 
prehension, uniformity,  standardization  and 
harmony, — the  materials  necessary  to  con- 
struct a  system  of  co-operative  efficiency, 
cannot  be  obtained.  It  is  this  information, 
mutually  contributed  to  the  common  fund  of 
trade  knowledge,  which  will  place  the  business 
upon  a  scientific  basis. 

Open  Business  under  open  competition  is  a  con- 
Q^  Q£  in(jiyiduai  experiences  and  experi- 
ments, guided  by  the  "rule  of  thumb"  and 
surmise.  It  is  hardly  necessary  to  state  that 
the  elimination  of  the  rule-of-thumb  and  guess- 
work, and  the  co-ordinating  of  these  individual 
experiences  and  experiments,  will  result  in  turn- 
ing the  direction  of  business  methods  into  a 
system  which  will  codify  trade  knowledge  and 
increase  the  possibility  of  results  to  be  ob- 
tained from  the  business. 

In  order  to  lay  the  foundation  for  reciprocal 
education,  we  must  first  unlearn  and  demolish 
the  old  competitive  policy  of  "each-for-him- 
self"  and  its  "dog-eat-dog"  methods. 

There  must  be  constructed  from  the  best 
parts  of  every  contributor's  information  a 


TRADE     CO-OPERATION 

solid  system  of  principles,  policies  and  facts. 
This  must  be  molded  into  trade  knowledge, 
guided  by  trade  opinion  and  applied  in  indi- 
vidual practice  to  produce  that  teamwork 
which  is  the  object  of  co-operative  education. 

It  must  then  be  plain  that  trade  co-opera-  A  Readjust- 
tion  is  not  a  superficial  application  of  some-  meni 
thing  to  business  as  it  now  exists,  but  a  radical 
readjustment  and  a  reconstruction  of  its  princi- 
ples, its  policies  and  its  methods.  Anything 
less  than  reconstruction  would  result  in  failure 
or  in  a  lack  of  results  which  is  equally  as  bad. 
So  radical  a  change,  especially  in  the  moral 
situation,  must  require  some  time  to  show 
results,  during  which  time  misgivings,  mis- 
takes are  bound  to  occur  and  recur,  but  as  it 
is  from  such  backsets  that  we  gain  experience 
it  should  not  discourage  us  as  to  the  ultimate 
good  to  be  accomplished. 

What  must  be  impressed  above  all  things 
upon  each  member  of  the  organization  is  that 
it  is  his  education  and  his  application  of  the 
knowledge  resulting,  co-ordinated  with  that  of 
his  fellows,  which  will  produce  community 
welfare — the  result  in  view. 

Therefore  Trade  Co-operation  actually 
requires  re-education,  and  instruction  in  its 


TRADE     CO-OPERATION 

principles  really  constitutes  a   postgraduate 
course  in  business. 


GENERAL  ARGUMENT 

The  General        The  economic  reasons  for  trade  co-opera- 
Argument  tjon  are  too  extensive  for  mOre  than  a  passing 

mention  in  this  book,  but  the  logical  reasons 
forming  the  groundwork  for  the  principles 
herein  outlined  are  fully  given  as  they  are 
essential  for  a  thorough  understanding  of  the 
subject. 

These  logical  reasons  make  plain  why 
trade  should  co-operate,  apart  from  the  eco- 
nomic reasons  which  decree  that  trade  must 
co-operate,  in  order  to  solve  the  problems 
presented  by  existing  and  prospective 
conditions. 

Democratic  Trade  co-operation  is  essentially  the  appli- 
ca^jon  of  democratic  principles  to  business. 
The  present  competitive  system,  if  system  it 
can  be  called,  is  feudal  in  effect. 

Anyone  familiar  with  the  principles  of 
democracy  as  applied  to  government  must 
freely  admit  that  in  a  democratic  community 
there  are  two  sets  of  rights  to  be  considered 
— individual  rights  and  community  rights. 
Where  there  is  doubt  as  to  which  is  entitled  to 

[26] 


TRADE     CO-OPERATION 

preference,  the  benefit  of  the  doubt  must  be 
given  to  the  community — as  of  interest  to  the 
greatest  number. 

In  the  business  community,  where  there  is 
an  absence  of  established  community  rights, 
there  is  a  constant  conflict  between  individual 
rights,  which  competition  intensifies,  and 
which  results  in  the  supremacy  of  the  strong, 
"the  right  of  might," — in  other  words,  the 
result  of  feudal  contest. 

The  object  of  democracy  being  to  consti- 
tute a  condition  to  make  possible  the  enjoy- 
ment of  the  "unalienable  (individual)  rights  of 
life,  liberty  and  the  pursuit  of  happiness," 
such  condition  must  afford  an  equitable  oppor- 
tunity for  all  individuals,  in  which  com- 
munity rights  will  be  recognized  as  paramount 
to  any  individual  right  or  license,  which  is 
always  prone  to  selfish  aggrandizement. 

In    order    to    guarantee    the    distinction  Legal 
between  the  rights  of  an  individual  and  those  Rights 
of  the  public,  government  is  established  to 
enact  laws  for  the  definition  of  these  respec- 
tive rights  and  courts  of  justice  are  constituted 
to  determine  the  equity. 

A  trade  community,  however,  being  but  a 
portion  of  the  civic  community  (the  public), 


TRADE     CO-OPERATION 

has  no  distinctive  legal  standing,  and  hence 
its  individuals,  while  observant  of  public 
rights,  too  frequently  ignore  the  rights  of  their 
trade  community. 

In  fact,  in  the  absence  of  established  or 
recognized  trade  community  rights,  the  in- 
dividuals are  actuated  solely  and  entirely  by 
selfish  impulse. 

Apparent  therefore  must  it  be,  that  trade 
community  rights  should  be  established,  and 
this  can  only  be  possible  where  the  indi- 
vidual units  convene,  co-operate,  and  deter- 
mine such  rights,  and,  further,  there  being  no 
legal  way  to  enforce  these  rights,  they  must 
be  recognized  and  observed  by  individual 
volition. 

True  Form  There  is  but  one  true  form  of  trade  co- 
operation, and  that  is  distinctly  voluntary,  in 
which  it  is  assumed  all  individuals  will  will- 
ingly strive  to  attain  the  object  in  view.  If 
their  liberty  of  action  is  restrained  by  any 
authority  or  an  enforceable  obligation,  such 
so-called  co-operation  becomes  impracticable 
and  probably  unlawful.  It  is  impracticable 
because  of  the  independent  nature  of  the 
business  man  which  repudiates  coercion,  and 
it  is  unlawful  as  it  implies  restraint  upon 

[28] 


TRADE     CO-OPERATION 

freedom  of  action  of  the  individual  by  means  True  Form 
which  seem  compulsory. 

The  voluntary  form  of  co-operation  is  truly 
democratic  and  depends  for  its  success  upon 
the  willing  acquiescence  of  all  minds  to  their 
community  opinion,  just  as  in  a  political 
sense  even  the  contrary-minded  yield  obedi- 
ence to  public  opinion. 

This  democratic  form  of  co-operation  there- 
fore requires  intelligent  co-ordination  of  mind 
and  of  effort  upon  the  part  of  its  members  and 
without  a  power  to  compel.  The  organization 
must  be  composed  of  superior  citizens  whose 
broad  intelligence  will  require  no  greater 
force  than  that  of  community  interest,  as 
proclaimed  by  trade  opinion,  to  put  into 
operation  by  individual  volition  the  requisite 
teamwork  to  accomplish  its  ends. 

This,  then,  is  the  problem  which  re- 
education has  to  solve. 


PART  III 

THE  RUDIMENTS  AND 
FUNDAMENTAL  PHILOSOPHY 


A  business  man  should  be  interested  in  the 
efficiency,  not  only  of  his  own  business,  but  of 
his  competitor's  business.  Rivalry  in  some  lines 
is  not  inconsistent  with  co-operation  in  others. 
A  proper  balance  of  the  two  makes  successful 
business.  Too  much  of  either  leads  to  destruc- 
tion. Rivalry  without  co-operation  means 
reckless,  destructive  competition;  co-operation 
without  rivalry  means  price-fixing — the  dry 
rot  of  business,  deservedly  condemned  by  the 
law. 

The  state  of  mind  which  makes  us  fear  to 
associate  with  our  competitor  and  which  makes 
us  suspicious  of  him  must  go.  It  does  not  be- 
long to  the  new  era  of  American  business  upon 
which  we  are  entering.  Our  competitor  is  not 
such  a  bad  fellow  after  all.  If  we  talk  over 
with  him  once  in  a  while  the  big  things  in  our 
business,  we  will  hate  him  less!  We  must  re- 
alize that  inefficiency  in  any  factory  in  our  in- 
dustry is  very  likely  to  react  seriously  on  us  and 
on  all  others  in  the  same  business.  *  *  *  The 
way  to  protect  ourselves  is  to  help  our  compet- 
itor to  become  efficient;  for  industry,  like  a  man, 
is  reformed  from  within.  It  is  the  duty  of  each 
of  us  to  preach  as  well  as  practice  the  gospel  of 
efficiency  and  to  co-operate  and  work  with 
others  to  raise  the  standards  of  producing  and 
selling. — "Awakening  of  Business." 
E.  N.  HURLEY. 

There  should  be  more  to  business  than  "buy, 
barter  and  sale,"  with  ill-assorted  parts  to  pro- 
duce friction,  lost  motion  and  a  minimum  of 
results. 

It  should  be  a  "system"  with  standardized 
gearing  and  with  co-ordinating  action  so  that 
the  results  therefrom  may  express  the  maximum 
of  efficiency — and  the  first  requisite  in  building 
such  a  system  is  mental  adjustment. — ED. 


THE  RUDIMENTS  AND  PHILOSOPHY 
What  is  business? 

Business  is  the  game  of  breadwinning — the  Business 
vocation  of  every  man — which  has  become  a 
contest  for  supremacy  in  a  race  for  patronage. 

What  occasions  this  contest? 
Competition. 

What  is  competition? 

Competition    is    a    natural    law    which,  competition 
through  its  process  of  contest  for  the  survival  Defined 
of  the  fittest,  provides  the  incentive  for  pro- 
gressive development.    As  is  evident,  its  un- 
bridled tendency,  if  permitted  to  continue  to 
its  consummation,  would  result  in  destruction 
through  the  mutual  annihilation  of  the  sur- 
vivors. 

In  business,  as  the  field  of  opportunity 
narrows,  unbridled  competition  occasions  a 
vicious  scramble  for  individual  advantage, 
producing  animosity  between  competitors 
and  waste  from  their  extravagant  efforts  to 
excel. 

To  make  competition  a  rational  and  con- 
structive force  for  intelligent  development 

[33] 


TRADE     CO-OPERATION 

therefore  requires  that  its  natural  tendency  be 
curbed  or  modified. 

Competition  will  always  be  in  evidence 
where  there  are  free  and  independent  interests 
in  pursuit  of  the  same  object,  but  only  when 
it  is  properly  bridled  (governed  by  ethics)  can 
it  be  productive  of  that  condition  in  which 
reposes  an  equity  of  opportunity. 

What   is   necessary   to   modify   the   unbridled 
tendency  of  competition? 
Co-operation. 

What  is  co-operation? 

Co-operation  Co-operation  is  the  teamwork  of  interested 
Defined  individuals  in  combined  effort  to  accomplish 
some  mutually  desired  result  and  is  therefore 
logically  the  natural  modifier  of  the  competi- 
tive tendency  to  strife.  The  very  nature  of 
co-operation  demands  order  and  organization 
and  consequently  is  opposed  to  the  chaos  and 
anarchy  of  unbridled  competition.  Only 
through  co-operation  has  mankind  become  a 
civilized  community  and  able  to  overcome  the 
disasters  of  intense  competition  so  as  to  ad- 
vance. Co-operation  between  independent 
units,  however,  can  go  only  so  far  as  the  com- 
mon interests  of  these  units  permit.  Therefore, 

[34] 


TRADE     CO-OPERATION 

the  effect  of  Trade  Go-operation  is  to  main- 
tain an  equitable  balance  between  individual 
liberty  in  competition  and  the  community 
interest. 

How  does  co-operation  modify  competition? 

Co-operation,  by  establishing  a  common  Modifying 
viewpoint  for  all  individuals  from  which  can  E&eei 
be  shown  that  the  community  interest  is  also 
the   best   interest   of  each   individual,   thus 
modifies  competitive  strife. 

How  is  this  demonstrated? 

The  common  knowledge  acquired  through  a 
free  and  open  interchange  of  information,  and 
through  frank  discussion,  eliminates  the  differ- 
ences and  misunderstandings  so  prevalent 
under  secretive  competitive  methods,  and 
enables  a  true  perspective  of  the  conditions. 
Knowledge  thus  gained  further  demonstrates 
that  practically  many  problems  in  business  are 
community  problems  which  may  and  can  only 
be  solved  by  co-operation. 

How  does  co-operation  affect  the  result  from 

business? 

Under  competitive  strife  the  results  from  Resutt 
business  are  scattering,  divided  and  diminished, 

[35] 


TRADE     CO-OPERATION 

on  account  of  friction,  unnecessary  and  ex- 
travagant service  and  by  wasteful  methods 
naturally  attendant  upon  such  strife;  whereas 
under  proper  co-operative  teamwork  the  re- 
sults are  conserved,  multiplied  and  therefore 
increased.  The  uniformity  introduced  induces 
both  efficiency  and  economy. 

It  is  the  difference  between  results  from 
divergent  interests  under  unknown  conditions 
in  competition  and  the  results  from  the  known 
and  understood  conditions  of  community  in- 
terest. 

Co-operation  opens  up  a  wider  scope  of 
possibilities  in  the  development  of  business. 

II 

What  is  a  Trade  Association? 

The  Trade        It  is  the  * 'machinery  of  co-operation"  as 
Association  appiied  to  trade. 

Does  it  tend  to  lessen  competition  between  its 

members? 

In  part,  because  it  holds  competition 
within  rational  bounds,  by  which  is  meant 
the  removal  of  the  misunderstandings  which 
cause  conflict,  through  the  reciprocal  exchange 
of  information.  It  does  not  obstruct  the  free 

[36] 


TRADE     CO-OPERATION 

play  of  orderly  competition  which  questions 
of  superiority  occasion. 

What  obligation  does  it  impose  upon  its  members? 
Not  having  the  power  to  bind,  it  cannot 
obligate,  but  it  reasonably  implies  the  observ- 
ance of  "the  ethics  of  the  trade"  as  expounded 
by  trade  opinion,  co-operative  principles  and 
the  purposes  expressed  in  the  constitution,  to 
all  of  which  self-interest  dictates  obedience. 

Has  it  no  force  to  compel  obedience  ? 

None,  except  moral  force.  Any  other  kind  Force  vs. 
of  force  opposes  the  principle  of  co-operation.  Obedience 
Voluntary  obedience  to  trade  opinion  and  the 
knowledge  gleaned  from  education  constitute 
the  only  force  necessary  and  when  members 
are  schooled  in  the  principles  of  co-operation 
it  becomes  a  very  strong  force.    Comprehen- 
sion of  matters  of  self-interest  inspires  loyalty 
to  community  welfare,  which  is  sufficient  to 
dictate  voluntary  action  by  the  individual. 

Agreements,  understandings  or  compacts 
of  any  kind  where  they  affect  the  freedom  of 
individual  action,  are  barred  by  the  nature  of 
true  co-operation.  Besides,  they  are  unlawful. 

How  about  majority  rule? 

The  majority  rule  cannot  be  used  to  force 

[37] 


TRADE     CO-OPERATION 

a  minority.  It  is  used  to  ascertain  and  test 
trade  sentiment,  and  if  the  sentiment  is  pre- 
ponderant, it  has  the  force  of  trade  opinion 
which  in  teamwork  is  sufficient  to  claim  the 
obedience  of  the  minority. 

What  is  Trade  Opinion? 

Trade  As  stated  above,  trade  opinion  is  the 
°Defined  PrePonderant  sentiment  expressed  by  a  trade 
community  upon  matters  of  common  interest. 
It  is  the  impelling  force  in  trade  co-operation, 
as  it  constitutes  the  moral  authority  to  which 
every  individual  member  owes  allegiance. 

Broadly,  what  objects  are  to  be  attained  by 

Association  work  ? 

objects  The  objects  of  trade  organization  are— 
Attained  ^o  determine  and  establish  the  community 
interest,  the  standardization  of  trade  senti- 
ments, methods  and  customs,  and  the  unifica- 
tion of  knowledge.  This  is  accomplished 
through  community  education  and  the  inter- 
change of  trade  information.  The  effect  is  to 
produce  harmony,  efficiency  and  economy  in 
trade  matters — in  brief,  the  betterment  of 
business. 


[38] 


TRADE     GO-OPERATION 

III 

What  about  price  ? 

Price — selling  price — should  be  the  final  Effect  Upon 
result  of  computation  after  all  fixed,  dependent  Price 
and  incidental  expenses  in  conducting  business 
have  been  determined.    It  is  the  individual's 
"inalienable"  right  to  make  his  selling  price 
without  restraint,  and  it  is  unlawful  for  two  or 
more  individuals  to  combine  in  fixing  price  by 
agreement,  understanding  or  by  any  other 
form  of  compact. 

Can  co-operation  control  price  competition? 

It  does  not  pretend  to  control  it.  Its 
effect,  however,  is  to  establish  a  valid  doubt  as 
to  the  necessity  for  indiscriminate  price  com- 
petition. 

When  through  co-operation,  every  member 
of  an  Association  is  enabled  to  know  all  condi- 
tions, especially  as  to  expense,  each  is  able  to 
determine  his  own  commensurate  selling  price. 
A  member's  judgment  being  based  upon  cor- 
rect knowledge  he  is  relieved  of  doubt  as  to 
competitive  possibilities  and  motives,  so  that 
his  conclusions  are  rational.  Under  unbridled 
competitive  conditions  this  knowledge  is  im- 
possible and  his  judgment  is  blinded  by  the 

[39] 


TRADE     CO-OPERATION 

unknown  conditions  and  presumptive  possi- 
bilities. 

The  Bone  of        Price   is    the    "bone    of   contention"    in 

Contention  competition  and  it  follows  the  leadership  of 

guesswork.    Under  co-operative  influences  it 

becomes  the  result  of  the  knowledge  of  facts 

and  it  follows  judgment. 

It  is  a  very  different  matter  when  you  know 
from  an  exchange  of  views  what  a  competitor 
really  thinks  and  knows  from  that  condition 
in  which  you  both  surmise  and  suspicion  what 
the  other  is  likely  to  do.  It  is  the  difference 
between  steering  a  ship  by  a  compass  and  with- 
out one. 

Co-operation,  then,  actually  tends  to  lessen  price 

competition? 

It  does,  certainly,  and  how  could  it  be 
otherwise,  when  competitive  abuses  are  cor- 
rected and  a  common  and  uniform  compre- 
hension of  facts  is  established? 

The  Result  The  effect  of  rational  price  determination 
under  such  conditions  is  to  maintain  necessary 
margins  over  the  cost  of  production  and  han- 
dling, tending  nominally  to  establish  a  stable 
selling  figure,  i.  e.,  a  "right  price." 

[40] 


TRADE     CO-OPERATION 

Only  in  the  absence  of  understood  co- 
operative principles,  and  in  the  ignorance  of 
facts,  do  individuals  thus  working  in  the  dark 
use  their  right  as  a  license  to  make  haphazard 
prices  to  the  demoralization  of  their  com- 
munity and  to  their  own  loss  or  destruction. 

IV 

//  co-operation  is  so  necessary  to  business, 
wherein  is  the  obstacle  to  its  accomplishment? 
The  Business  Man. 

What  is  the  matter  with  the  business  man? 

Simply  those  inherent  traits  and  taints  of  Obstacles 
human  nature  which  are  ever  obstacles  to 
man's  progress.  Beginning  with  the  incom- 
patability  of  minds,  we  find  some  men  are  far- 
sighted,  some  short-sighted;  some  are  deep, 
some  shallow;  some  are  broad,  others  narrow. 
Then  we  have  the  natural  taints,  such  as 
avarice,  deceit,  doubt,  envy,  suspicion,  selfish- 
ness, etc.;  and  finally,  the  acquired  habits — 
competitive  habits,  careless  complacency, 
lethargic  conservatism. 

Can  these  obstacles  be  overcome? 

Yes,  by  re-education,  meaning  a  higher  The 
education  in  the  principles  of  co-operation,  Correciwn 


TRADE     GO-OPERATION 

which  indicates  the  knowledge    obtained 
through  an  open  interchange  of  information. 

With  constant  contact  between  men 
differences  of  opinion  become  reconciled, 
knowledge  establishes  confidence  by  dispelling 
the  doubts  of  ignorance,  and  community 
thinking  eliminates  personal  pecularities  and 
inspires  loyalty. 

Is  this  possible  and  practical  ? 

Yes,  when  necessity  dictates,  and  when 
good-fellowship  permits  rational  thought  to 
overcome  competitive  prejudices,  it  is  both 
possible  and  practical. 

As  you  cannot  choose  competitors,  how  can  you 

induce  good-fellowship  ? 

When  men  know  each  other  as  men,  and 
not  as  competitors  only,  they  are  invariably 
surprised  to  learn  that  it  has  been  like  circum- 
stances in  the  experience  of  each  which  have 
been  the  causes  of  misunderstanding,  and  also 
to  find  that  others  are  actuated  by  the  same 
principles  which  they  themselves  entertain. 

Then  does  co-operation  introduce  the  "Golden 

Rule"  into  business  ? 
The  Golden        In  a  way,  perhaps,  for  after  all,  that  rule 

Rufe 


TRADE     GO-OPERATION 

merely  implies  that  men  should  think  "fair," 
act  "fair,"  as  well  as  talk  "fair,"  and  this  they 
will  do  when  they  are  made  to  realize,  by 
comprehension  of  the  facts,  that  it  is  to  their 
best  interest  to  be  fair. 

V 

What  has   caused  competition   to   become  so 
vicious  that  co-operation  is  now  necessary 
to  control  its  effect? 
Simply  the  changes  wrought  by  economic  Economic 

law.  ^ 

What  is  Economic  Law? 

It  is  that  natural  law  which  determines  the 
development  and  distribution  of  wealth.  Busi- 
ness is  intimately  affected  by  the  changes 
evolved  by  this  law.  We  are  at  present  pass- 
ing through  the  greatest  economic  change  in 
the  history  of  the  world. 

What  are  the  causes  for  this  change? 

1st:  The  result  of  scientific  research,  dis-  The  Causes 
covery  and  invention. 

2nd:  The  readjustment  of  industrial  and 
social  conditions,  due  to  the  rapid  develop- 
ment and  adaptation  of  steam  and  electricity 

[43] 


TRADE     CO-OPERATION 

to  communication,  transportation  and  manu- 
facture. 

3rd:  Acquisition  of  wealth  by  the  people 
and  its  accumulation  by  individuals  and 
corporate  interests. 

4th:  The  World  War. 

What  are  the  effects  of  these  changes? 
The  Effects  1st:  The  stimulation  of  production  and 
manufacture,  the  cheapening  of  conveniences 
and  luxuries,  and  the  improved  facilities  for 
distribution,  the  result  of  which  is  the  intensi- 
fying of  competition. 

2nd :  The  incessant  demand  by  the  people 
for  convenience,  luxury  and  innovation,  and 
the  friction  between  so-called  classes  for  an 
equitable  division  of  the  results  of  industry, 
both  of  which  effects  tend  to  elevate  the  stand- 
ard and  increase  the  cost  of  living. 

3rd:  The  readjustment  of  international 
relations  affecting  commerce,  finance  and 
transportation  and  the  impending  growth  of 
international  competition. 

VI 

How  does  the  law  view  trade  co-operation  ? 
The  statute        It  does  not  hold  it  as  contrary  to  the  public 
Law  interest  so  long  as  acts  under  its  influence  do 

[44] 


TRADE    CO-OPERATION 

not  violate  the  law.  If  the  acts  of  a  trade  body 
are  kept  true  to  co-operative  principles  they 
cannot  in  any  way  conflict  with  the  law. 

The  Sherman  Anti-Trust  Law  ? 

This  law  forbids  combinations,  contracts, 
etc.,  "in  restraint  of  trade"  and  it  forbids 
"monopoly,"  neither  of  which  are  possible 
under  the  principles  of  true  co-operation. 

The  Clayton  Law  ? 

This  law  forbids  certain  inequitable  dis- 
criminations in  trade  practices.  One  of  the 
objects  of  trade  co-operation  is  to  eliminate 
all  unjust  discriminations  and  inequalities  in 
trade. 

The  Federal  Trade  Commission  Law  ? 

This  law,  which  establishes  the  Federal 
Trade  Commission,  also  forbids  unfair  meth- 
ods which  unduly  restrain  competition,  the 
prevention  of  which  is  yet  another  of  the 
purposes  and  effects  of  trade  co-operation. 

How  does  the  Federal  Trade  Commission  view 

trade  organization? 

"Go-operation  is  the  watchword  of  our  Opinions 
day — co-operation    among  business   men, 

[45] 


TRADE     GO-OPERATION 

co-operation  between  employer  and  employe, 
co-operation  between  business  and  govern- 
ment. *  *  *  *  Trade  associations  and  similar 
organizations  are  among  the  most  hopeful 
agencies  of  efficient  industry.  Their  field  of 
activity  should  be  extended  and  their  work 
made  more  efficient."— E.  N.  Hurley,  formerly 
Chairman  Federal  Trade  Commission. 

And  the  Administration? 

"Your  suggestion  that  trade  Associations 
*  *  *  should  be  encouraged  in  every  feasible 
way  by  the  government  seems  to  me  a  very 
wise  one." — Pres.  Wilson  to  Mr.  Hurley. 

VII 

What  are  some  of  the  practical  advantages  of 

trade  co-operation  in  association  work  ? 
Advantages  The  elimination  of  trade  abuses,  evil 
practices  and  unfair  competition; — the  estab- 
lishment of  uniform  trade  customs ; — the  adop- 
tion of  standardized  methods  and  improve- 
ments in  technical  equipment; — the  unification 
of  system  (accounting,  credits,  costs,  distribu- 
tion, etc.) ; — and  the  harmonizing  of  sentiment 
into  an  understood  Community  Opinion  as  a 
guide  to  individual  conduct. 

It  should  be  evident  that  the  efficiency  and 

[46] 


TRADE     CO-OPERATION 

economy  resulting  from  the  reconstruction  of  a 
trade  upon  these  lines  must  eliminate  that  "un- 
unknown  quantity"  about  which  competi- 
tive strife  always  centers,  and  establish  in  the 
conduct  of  business  a  higher  development. 

What  education  is  necessary  to  attain  the  objects 

of  trade  co-operation  ? 

1st:  Realization  that  the  game  of  bread-  Necessary 
winning  should  be  a  fair  game  and  that  com-  Krmakd^ 
petitors  are  men  built  upon  the  same  lines. 

2nd:  Knowledge  of  economic  conditions 
and  the  reasons  for  competitive  misunder- 
standings affecting  business.  Understanding 
of  the  principles  of  co-operation  and  knowledge 
of  the  law. 

3rd:  Technical  knowledge  to  produce  effi- 
ciency and  economy  in  a  trade  community. 

Uih\  Establishment  of  community  opinion 
and  trade  ethics  so  that  the  individual  may 
intelligently  play  his  part  in  the  teamwork  to 
develop  and  defend  community  interests. 

5th:  Realization  that  patience  and  some 
sacrifice  of  personal  advantage  is  necessary  to 
attain  and  uphold  the  high  standard  demanded 
by  success. 

The  sum  and  substance,  the  letter  and  the  and 

r     ~  "I  Substance 


TRADE     GO-OPERATION 

spirit,  of  co-operative  education  is:  that  the 
individual's  best  interests  are  in  his  com- 
munity interest,  and  as  trade  opinion  is  the 
expression  of  this  interest,  that  the  opinion 
be  so  firmly  fixed  in  his  understanding  that 
instinctively  he  will  direct  his  acts  to  ac- 
cord therewith,  in  friendliness,  in  harmony, 
in  uniformity  and  in  loyalty. 

Such  education  requires  that  the  business 
man  must  be  re-educated,  must  take  a  "post- 
graduate" course  in  business,  in  order  to  re- 
adjust his  mental  attitude,  his  methods  and  his 
actions  to  the  new  conditions,  and,  like  all 
proper  instruction,  this  should  proceed  step 
by  step.  Education  in  co-operative  work  is  a 
community  accomplishment,  but  it  must  be 
individually  acquired. 

How  is  this  instruction  to  be  obtained? 
Systematic        Naturally  the  question  arises — if  the  logic 
instructions  fe  correct  and  the  economic  necessity  sustains 
it — what  process  of  education  is  necessary  to 
place  in  effect  the  principles  of  co-operation? 
This  is  the  critical  question  to  which  there  is 
but  one  answer — a  system  of  instruction. 

Some  system  of  instruction  to  produce  uni- 
formity of  education;  some  method  of  impart- 
ing and  exchanging  information,  so  that  a 

[48] 


TRADE     CO-OPERATION 

common  comprehension  of  trade  conditions 
may  be  acquired;  some  basic  principles  upon 
which  the  science  of  business  may  be  estab- 
lished; are  indispensable  requisites  to  the  fit- 
ting of  business  men  to  the  task  of  co-opera- 
tive trade  building. 

VIII 

THE  SUMMARY 

The  preceding  discourse  was  designed  to  The 
bring  out  as  clearly  and  distinctly  as  possible  Summary 
the  rudiments  and  philosophy  of  trade  co- 
operation. m 

In  reviewing  we  may  readily  outline  the 
deductions : 

1st:  We  are  made  to  realize  that  business  Deductions 
is  a  necessary  everyday  condition  in  man's 
life; — that  its  process  is  governed  by  a  natural 
law  of  development,  known  as  competition; — 
that  competition  without  human  regulation 
is  bound  to  follow  its  natural  tendency  to  pro- 
duce "the  survival  of  the  fittest"; — that  in  all 
affairs  of  man,  excepting  business,  competition 
has  been  modified,  controlled  or  regulated  by 
means  of  co-operation  between  fellow-work- 
ers; and — that  if  business  is  to  be  relieved  of 
the  burden  of  unbridled  competition  it  there- 
fore must  also  be  made  co-operative. 

[49] 


TRADE     GO-OPERATION 

Community  2nd:  That  in  order  to  accomplish  this,  com- 
interest  munfty  opinion  must  be  formed  as  a  means 
to  determine  community  interest,  with  which 
all  individual  interests  may  be  content; — that 
the  establishment  of  community  interest  will 
produce  uniformity  and  community  efficiency 
which  is  the  object  of  trade  association;  and— 
that  the  accomplishment  of  these  conditions 
depends  upon  and  necessitates  the  co-ordina- 
tion of  individual  acts. 

obstacles  in  3rd:  That  the  obstacles  in  the  way  of 
Way  accomplishment  are  natural,  moral,  economic 
a*id  legal,  which  indicate  that  the  individual 
must  be  re-educated  in  a  higher  plane  of  duty 
and  of  technical  knowledge; — that  he  must 
understand  through  reciprocal  interchange  of 
facts  and  experience  all  economic  conditions 
so  that  he  may  correct  the  errors  of  individual 
methods  and  establish  in  their  place  uniform, 
efficient  standards ;  and — that  the  false  theories 
underlying  the  statute  law  be  dispelled  by  the 
broadening  of  community  intelligence. 


Forming        To  further  gather  together  the  ends  of  the 
Trade  preceding  discourse  it  will  be  well  to  elucidate 

Opinion  x  °  .  ,      .. 

certain  points  touched  upon. 

The  determination  of  the  community  in- 
terest in  order  that  it  may  be  saved  from  the 

[50] 


TRADE     GO-OPERATION 

waste  of  competitive  warfare,  so  that  all  Forming 
concerned  may  share  its  benefits  equitably,  is  Jj0^6 

J  n  j  >         Opinion 

the  ultimate  purpose  of  trade  organization. 

To  determine  just  what  constitutes  the 
community  interest  requires  the  focal  influence 
of  trade  opinion,  and  in  order  to  ascertain  this 
focal  point  a  common  viewpoint  must  first  be 
found. 

There  is  but  one  way  to  find  this  common 
viewpoint  and  that  is  to  compile  the  facts  and 
aggregate  the  experience  of  all  individuals 
and  through  discussion  and  argument  to  sift 
therefrom  that  upon  which  community  opin- 
ion rests.  This  infers  a  reciprocal  interchange 
of  opinions  and  experiences  between  and 
among  the  individuals  of  the  trade,  each  con- 
tributing to  the  common  fund  of  information. 

It  is  very  evident  that  this  interchange  will 
require  the  elimination  of  all  competitive  se- 
crecy, and  necessitate  a  very  open,  comprehen- 
sive and  frank  discussion  upon  all  points  if  the 
true  community  opinion  is  to  be  ascertained. 

In  combinations  there  is  either  an  active 
or  latent  force  which  compels,  as  illustrated 
in  producers'  associations  and  labor  unions, 
both  of  which  have  been  made  exceptions  to 
the  effect  of  the  Sherman  Anti-Trust  law. 

With  trade  association  it  is  different, 


TRADE     GO-OPERATION 

because  it  is  not  aimed  to  force  action  or  obedi- 
ence, but  to  make  clear  the  reason  for  both. 
No  action,  therefore,  can  ensue  unless  there 
is  a  clear  comprehension  of  the  subject — in 
other  words,  an  established  trade  opinion, 
which  is  the  only  authority  valid  in  co-opera- 
tion. Hence  the  necessity  to  establish  such 
opinion,  as  the  focal  point,  by  which  to  de- 
termine community  interest.  Hence  also  the 
futility  of  agreements  or  compacts  in  any 
manner  of  form  to  take  the  place  of  trade 
opinion  as  they  simply  have  the  effect  of  an 
armed  truce,  repugnant  to  true  co-operation. 

Community  opinion  is  the  preponderant 
sentiment  of  a  trade.  Where  there  is  a  "twi- 
light zone"  between  individual  interests  and 
community  interest,  or  where  there  is  a  valid 
minority  upon  any  question,  until  such  time 
when  conditions  change,  the  subject  of  con- 
troversy should  be  tabled,  shelved  or  made 
taboo. 


Scientific        Economic  law  is  the  great  arbiter  of  busi- 
ly/op- negg  conciitions.     The  world    in    these  days 
moves  rapidly.     It  is  no  longer  possible  to 
compare  impossibility  with  the  act  of  flying, 
because  today  men  do  fly. 

Science  is  continually  and  incessantly 


TRADE     GO-OPERATION 

discovering,  improving,  applying,  so  that  irre- 
sistibly the  conditions  change  in  sympathy 
with  development.  Competition  under  the 
pressure  of  science  is  moving  nearer  and  nearer 
the  extremity  of  endurance.  It  must  be  mod- 
ified, regulated  or  controlled  to  serve  the 
business  community  and  the  day  of  readjust- 
ment is  at  hand. 

We  know  that  we  cannot  fight  the  battles 
of  today  with  the  weapons  and  methods  of 
our  fathers  and  yet  still  we  cling  to  the  tra- 
ditional competitive  "freedom"  inherited  from 
past  generations  to  meet  the  intricate  eco- 
nomic changes  of  modern  times. 

It  is  absurd,  it  is  inane,  for  it  is  impossible! 


The  greatest  problem  in  co-operation  is  the  The  Personal 
"personal  equation."  Equaiion 

To  correct  the  habits  of  the  business  man 
contracted  through  years  of  competitive  strife; 
to  relieve  him  of  the  fears  of  his  competitor, 
inherited  from  his  ancestors  of  the  stone  age; 
to  convince  him  that  in  community  interest 
his  individual  interests  are  best  protected, 
is  to  practically  change  his  nature — a  very 
difficult  task. 

Then  again,  the  independent  man  of  busi- 
ness has  faith  first  in  his  own  judgment.  To 

[53] 


TRADE     GO-OPERATION 

prove  to  him  that  the  community  judgment 
is  superior  to  his  own,  is  another,  also  a  dif- 
ficult task. 

But  all  men  are  susceptible  to  reason,  some 
slower  perhaps  than  others,  so  reason  must 
in  time  broaden  their  intelligence  and  convince 
them  that  in  community  interest  is  the  indi- 
vidual's best  welfare,  that  in  community 
opinion  is  the  best  judgment  and  that  it  is 
up  to  the  individual's  own  acts  to  prove  it. 

It  should  be  perfectly  evident  that  if  a 
trade  community  is  not  prosperous,  its  indi- 
viduals cannot  prosper,  and  as  a  trade  com- 
munity is  composed  of  competitors,  if  these 
competitors  prevent  each  other  from  prosper- 
ing, that  the  community  cannot  and  will  not 
prosper. 

If,  therefore,  the  conditions  in  a  business 
are  not  satisfactory,  it  is  alone  within  the 
power  of  its  individuals  to  make  it  so.  They 
can  regulate  the  conditions  of  competition  so 
that  the  community  and  its  individuals  may 
prosper,  but  only  if  they  establish  first  the 
common  groundwork  of  community  interest. 

individual        A  component  part  of  the  solution  to  this 

ReSPbUit    an^ to  every  otner  problem,  is  in  the  possession 
of  each  individual,  and  that  individual  who  will 

[54] 


TRADE     CO-OPERATION 

not  set  aside  his  private  opinions  or  his  indi- 
vidual interests  where  they  plainly  conflict 
with  community  opinion  or  interest,  blocks 
progress  with  evident  purpose  to  make  capital 
at  the  expense  of  his  community. 

The  only  way  to  get  rid  of  an  obstructing 
limb  is  to  cut  it  off.  A  man  who  stands  aloof 
from  assisting  in  co-operation  will  hamper 
progress  just  so  long  as  he  is  considered  a  part 
of  the  community.  No  man  can  afford  to  be 
cut  off  from  his  trade  community,  not  even 
the  biggest,  for  where  he  loses  the  consideration 
of  his  community,  whether  on  account  of 
anger,  pique  or  selfish  interest,  he  will  even- 
tually become  a  forgotten  and  negligible 
quantity. 

In  competitive  business,  price  is  the  natural  Price 
bone  of  contention.  It  is  so  because  of  the 
mystery  or  secrecy  surrounding  the  motives 
and  unknown  facts  under  open  competition, 
and  such  are  bound  to  breed  both  skepticism 
and  reprisal. 

Under  a  co-operative  system,  where  "every 
card  is  played  face  up,"  where  light  is  thrown 
upon  every  transaction,  where  all  information 
is  open  to  individual  scrutiny,  the  matter  of 
price  resolves  into  a  simple  question  of  cost, 

[55] 


TRADE     CO-OPERATION 

plus  expense,  plus  such  profit  as  may  be 
determined  by  individual  judgment  with  all 
points  known  and  considered. 

Co-operation  cannot  eliminate  price  com- 
petition but  it  does  render  it  rational  and  the 
harmony  of  relations  removes  its  sting. 

Under  proper  co-operative  influence  the 
subject  of  price  assumes  quite  a  secondary 
aspect,  efficiency  and  its  application  by  in- 
dividuals becoming  the  vital  subject. 


False  False  economic  theories,  bred  during  the 
s  immaturity  of  modern  business  development 
together  with  the  ignorant  following  of  these 
theories,  are  responsible  for  the  legal  strictures 
by  which  business  liberty  as  to  community 
rights  is,  in  many  ways,  restricted. 

The  law  is  unquestionably  behind  the  times 
as  it  follows  and  cannot  keep  pace  with  eco- 
nomic development,  hence  there  is  a  discon- 
certing gap  between  the  law  and  the  economic 
necessities  of  trade. 

The  Law        The  "Law  Merchant"  by  which,  in  ancient 
Merchant  times,  the  equity  of  trade  customs  and  neces- 
sities were  recognized  and  established,  through 
both  usage  and  evidence,  should  be  revived, 
modernized  and  made  elastic.     It  is  the  sadly 

[56] 


TRADE     CO-OPERATION 

needed   basis  for   laws   enacted   to   regulate  The  Law 
business. 

In  such  direction  (unconsciously  perhaps) 
is  the  trend  of  the  Federal  Trade  Commission, 
and  it  is  sincerely  hoped  that  in  time  the  de- 
cisions of  that  tribunal  may  evolve  a  new  law 
merchant.  The  force  of  economic  change  is 
persistent  and  no  doubt  will  assist  in  hastening 
the  happy  day. 


[57] 


PART  IV 
THE  ESSENTIAL  PRINCIPLES 


Co-operation  may  be  classified  under  the 
science  of  government,  for  the  object  of  each  is 
similar.  Every  successful  co-operative  effort 
is  founded  upon  scientific  principles. 

Business  inexactness  has  been  the  prime 
cause  for  discomfiture  and  lack  of  proper  re- 
sults, so  it  too  must  be  anchored  by  scientific 
principles  before  it  can  be  made  effective  as  an 
efficient  community  process. 

Trade  co-operation  which  supplies  the  means 
to  this  end  must  therefore  be  based  upon  prin- 
ciples. 

If  we  take  the  military  science,  the  oldest 
form  of  co-operation,  by  which  to  illustrate,  we 
readily  conceive  that  its  essential  principles 
must  contain— physical  fitness,  discipline,  pre- 
cision, obedience  and  loyalty. 

Likewise  the  essential  principles  in  trade 
co-operation  are: — Good-fellowship,  comprehen- 
sion, uniformity,  harmony,  and  volition. 


THE  ESSENTIAL 

PRINCIPLES  OF  TRADE  GO-OPERATION 
WITH  COROLLARIES 


GOOD-FELLOWSHIP 


COMPREHENSION 


UNIFORMITY 


HARMONY 


VOLITION 


Courtesy  and  cordiality. 
Frank  and  open  discussion. 
Fair  and  square  dealing. 

Necessity  for  co-operation. 
Co-operative  principles. 
Trade  conditions. 
Competitive  conditions. 
Economic  situation. 
False  theories. 
The  law. 

Standardization  of  methods. 
Technical     standards     and 

equipment. 
Systems — (credit,  costs,  etc.) 

Functional  relations. 
Trade  distribution. 
Trade  Ethics — Moral  princi- 
ples. 

Teamwork. 

Conduct. 

Self-control. 


[61] 


I — GOOD-FELLOWSHIP 

Good-fellowship  signifies  mutual  friend- 
liness— within  a  community.  It  is  the  founda- 
tion of  co-operative  work,  without  which  effective 
results  would  be  impossible.  Organization  is  its 
sequel. 

(A)  COURTESY   AND   CORDIALITY  are   in-  Friendliness 
tegral  parts  of  good-fellowship  and  when  you 

know  your  co-operator  as  a  man  like  yourself, 
and  forget  that  he  is  a  competitor,  you  can  ful- 
fill the  first  requirements  of  this  principle. 

(B)  A   FRANK  AND  OPEN   DISCUSSION  Upon   Open 

any  and  all  matters  and  conditions  pertaining  Discussion 
to  the  trade  is  the  second  indispensable  requi- 
site for  good-fellowship.  There  must  be  no 
secrecy  in  co-operation.  Secrecy  is  the  pitfall 
used  by  competitive  spite  to  ensnare  upright 
business.  It  is  only  from  an  interchange  of  ex- 
perience, ideas,  opinions  and  methods  that 
knowledge  of  true  fads  is  obtainable  and  con- 
fidence can  be  established. 

(G)  FAIR  DEALING — surely  it  must  be  re-  Fair 
alized  that  fair  dealing  is  indispensable  to  co-  Dealin9 
operation.    To  be  fair  and  square  in  thought, 
word  and  deed,   is  the  final  and  crowning 
necessity  in  the  principle  of  good-fellowship. 

[63] 


TRADE     GO-OPERATION 

Business  is  the  serious  game  of  bread- 
winning,  and  like  a  game  between  good  fellows 
it  should  be  fair  and  square  and  according  to 
rule.  There  is  keen  pleasure  in  fair  rivalry, 
where  skill  is  the  only  possible  offset  to  the 
average  of  benefits  derived;  but  there  is 
neither  fun  nor  profit  where  unfair  methods 
are  employed, — methods  which  speak  of  the 
cad  and  the  cheat.  Therefore,  always,  the 
rules  of  the  game  must  be  observed  before  any 
play  is  made  for  personal  advantage,  and— 
good-fellowship  is  the  first  rule. 

Organization  is  obviously  a  necessary  con- 
dition for  business  fellowship,  as  only  through 
the  means  of  organization  can  definite  results 
from  it  be  obtained. 

II — COMPREHENSION 

Comprehension  signifies  understanding  of 
the  principles  of  co-operation  and  of  the  science 
of  business  as  adapted  to  trade.  It  means  knowl- 
edge as  opposed  to  ignorance,  guesswork  and 
the  rule  of  thumb.  It  implies  education  and  in- 
formation. 

Intelligent  (A)    THE     NECESSITY     FOR     GO-OPERATION. 

Understand-  Primarily  the  necessity  for  co-operation  is  to 
establish  an  understanding  of  what  consti- 
tutes the  common  interest  of  community  wel- 
fare, in  which  each  and  every  member  of  the 


TRADE     CO-OPERATION 

trade  community  shares  equally.  That  both 
trade  progress  and  individual  success  are 
dependent  upon  this  welfare  should  sink 
deeply  into  the  understanding. 

(B)    GO-OPERATIVE     PRINCIPLES.      These  Principles 
principles  constitute  the  points  of  the  compass 
by  which  it  is  necessary  to  steer  the  ship  of 
trade  into  the  port  of  community  interest. 

(G)  TRADE    CONDITIONS.    Knowledge    of  Trade 
trade  conditions,  which  cover  a  wide  scope,  is  Condlilons 
made  possible  only  by  that  open  interchange 
of  trade  information  through  frank  discussion, 
which  creates  a  common  understanding.    You 
cannot  know  these  conditions  unless  you  know 
your  co-operator's  policy,  his  opinion,  his  ex- 
perience and  his  methods,  and  he,  yours.    The 
interchange  of  information  reveals  the  true 
conditions. 

(D)  COMPETITIVE     CONDITIONS.       Com-  Competitive 
petitive  conditions  must  also  be  subject  to  Conditions 
frank   discussion   and   interchange  of  facts. 
Reports  and  hearsay  evidence  against  each 
other's  conduct  must  be  clarified  by  such 
interchange. 

(E)  ECONOMIC  CONDITIONS.    (Here  we  Economic 
diverge  from  learning  from  the  interchange  Conditions 
of  information  to  reading  and  study.)    Eco- 
nomics is  nothing   but  a  study  of   the  in- 


TRADE     CO-OPERATION 

fluences  of  the  times  upon  business.  It  is 
necessary  knowledge  which  every  up-to-date 
business  man  should  possess.  Without  such 
knowledge  (i.  e.,  an  understanding  of  the 
whys  and  wherefores  of  all  conditions  in  his 
business  and  around  his  business)  the  busi- 
ness man  interposes  mere  expedients  against 
the  mighty  flood  of  economic  law.  With  an 
understanding  of  the  effect  of  these  laws  he  can 
adjust  his  course  with  the  current  and  steer 
his  business  in  a  progressive  direction. 
False  (F)  FALSE  THEORIES.  False  theories  are 

Theories  constantly  attacking  business.  They  are  the 
evil  spirits  which  prey  upon  legitimate  busi- 
ness, disturbing  influences  which  turn  popular 
ignorance  against  a  trade  or  its  methods.  They 
are  the  tools  of  fault-finding  busybodies  of 
trade.  They  will  be  found  in  unfair  competi- 
tion, in  newspapers,  in  muckraking  magazine 
articles,  in  the  legislature,  and  in  the  laws. 
Trade  efficiency  and  a  proper  amount  of 
publicity  is  the  best  protection  against  them. 

The  Law  (G)  THE  LAW.  Every  business  man  should 
be  well  acquainted  with  the  laws  which  affect 
his  rights  and  his  actions.  It  is  absolutely 
necessary  that  each  individual  should  under- 
stand the  Sherman  law,  the  Clayton  law,  the 
Trade  Commission  law,  as  well  as  the  State  laws. 

[66] 


TRADE     CO -OPERATION 

The  opinions  and  decisions  of  courts  and  of  the 
Federal  Trade  Commission  are  also  necessary 
in  order  to  understand  individual  rights  and 
restrictions. 

Ill — UNIFORMITY 

Uniformity  signifies  system-*-an  orderly 
arrangement  of  trade  methods,  obtained  through 
Trade  Opinion  and  adopted  by  the  units  of 
trade.  It  constitutes  the  code  of  business  pro- 
cedure, the  manual  of  training. 

(A)  STANDARDIZATION  OF  METHODS.  There  standard^ 
can  be  no  co-ordination  in  trade  relations  zation 
without  uniformity  of  purpose.    Trade  meth- 
ods are  innumerable  and  should  be  carefully 
considered  in  order  to  eliminate  from  them 
abuses,    evil    practices  and  careless    habits. 
When  a  bad  practice  becomes  a  habit  it  means 
demoralization — a    good    habit    becomes    a 
wholesome  custom.     Therefore,  it  should  be 

the  constant  aim  to  reform  indifferent  habits 
and  establish  regulated  customs. 

(B)  TECHNICAL   STANDARDS.     Standardi- 
zation  means  also  the  adaptation  of  efficiency 
and  economy  to  the  entire  business  system. 
If,  of  a  manufacturer,  it  should  include  factory 
machinery,  equipment  and  methods;  other- 
wise, as  of  a  distributer,  the  general  and 


TRADE     CO-OPERATION 

departmental  management,  the  purchasing  and 
sales  systems. 

System  (Q  SYSTEM.  There  are  two  or  three  sys- 
tems which  ought  to  be  uniform  in  application 
in  order  to  be  thoroughly  co-operative  in 
nature.  The  accounting  system,  a  classifi- 
cation of  goods  system,  a  system  of  cost  de- 
termination, and  the  system  of  profit  sharing, 
should  be  identical,  or  as  nearly  so  as  practical, 
with  those  of  other  members  of  the  community. 
Another  important  system  which  can  only 
be  adopted  as  a  trade  system,  is  that  of  credit 
interchange  and  investigation. 

It  can  be  readily  discerned  that  such  uni- 
formity is  dependent  upon  the  determining 
influence  of  trade  opinion. 

IV — HARMONY 

Harmony  signifies  the  application  of  the 
knowledge  gained  through  the  principles  of 
good-fellowship,  comprehension  and  uniformity. 
It  indicates  established  community  interests. 

Harmony  (A)  HARMONY  signifies  the  operation  in  a 
trade  of  uniform  standards,  customs,  methods 
and  systems. 

In  addition  to  this  it  includes  the  rela- 
tionship between  functions  in  trade  distri- 
bution, and  the  observance  of  trade  ethics. 

[68] 


TRADE     CO-OPERATION 

(B)  FUNCTIONAL  RELATIONS.    Many  lines  Trade 
of  trade  are  distinctly  divided  into  functions,  RMion8 
i.  e.,  manufacturing  or  packing,  wholesaling 
or  jobbing,  and  retailing. 

A  harmonious  relationship  between  and 
among  these  factors  is  of  prime  necessity  for 
co-operation  between  them,  for  to  every  func- 
tion should  be  known  and  respected  the  ethics 
of  its  lateral  branches,  as  well  as  of  its  own. 

(G)  TRADE  DISTRIBUTION.  Particularly  is  Distribution 
the  observance  of  proper  trade  distribution  in 
inter-co-operation  necessary  to  the  preserva- 
tion of  the  trade  unity  and  welfare.  If  you 
are  a  manufacturer  your  policy  of  distribution 
should  be  announced  and  adhered  to.  If  you 
elect  the  jobber  as  your  distributer  you  should 
be  as  loyal  to  him  and  to  his  interests  as  the 
jobber  should  be  loyal  to  you.  The  jobber 
should  sell  to  the  retail  trade  exclusively,  or 
if  elsewhere,  only  where  it  does  not  affect  the 
interests  of  that  function.  If  you  are  a  re- 
tailer you  should  buy  only  of  the  jobber  and 
not  attempt  to  pass  over  his  head.  The  lack 
of  observance  of  this  principle  encourages  that 
revolution  in  trade  methods  (quite  apparent 
today)  which  demoralizes  legitimate  trade 
relations.  It  is  the  disloyalty  of  individuals 
to  their  trade  functions  and  hence  to  the 


TRADE     GO-OPERATION 

established  channels  of  distribution  which  sus- 
tains false  theory  and  causes  disturbance  of 
uniform  conditions.  This  may  be  illustrated  by 
mailorder  houses,  chain  stores  and  co-operative 
buying  clubs,  which  are  made  possible  only 
by  breaking  down  established  customs.  Loy- 
alty to  trade  interests,  which  incidentally  are 
one's  own  interests  too,  should  govern  the  in- 
dividual at  all  times. 

Morals  (D)  MORAL  PRINCIPLES.  And  now  we  pass 
to  the  particularly  ethical  principles  in  co- 
operation. 

Your  highest  standard  is  the  Golden  Rule, 
modified: 

Do  unto  others  for  thine  own  sake  what  thou 
wouldst  that  others  do  unto  you  and  in  so  do- 
ing accept  a  law  from  which  thou  canst  not 
escape. — THOMASIUS. 

When  for  our  own  sake  we  do  those  things 
which  others  desire,  and  who  reciprocate  in 
the  doing,  we  are  following  the  natural  law 
from  whose  penalties  for  neglect  we  cannot 
otherwise  escape. 

The  following  of  this  law  would  cleanse 
business  of  its  abuses,  its  evil  practices,  and 
correct  in  the  business  men  those  traits  of 
character  which  mar  humanity  and  which 

[70] 


TRADE     GO-OPERATION 

are  so  especially  evident  in  business  inter- 
course. 

Unless  we  follow  such  standards  how  can 
the  community  interest,  which  denotes  those 
things  which  are  necessary  for  common  welfare, 
be  made  stable  and  secure? 

For  any  higher  attainment  it  is  necessary  to 
have  an  ideal  and  while  we  may  never  reach  it, 
the  inspiration  derived  from  its  influence,  is  a 
constant  incentive  to  greater  effort.  The  gait 
which  one  advanced  member  of  a  trade 
assumes  will  influence  the  pace  of  others. 
If  one  or  more  cannot  keep  step,  patience,  for- 
bearance and  example  will  in  time  show,  lead 
and  impress  them.  The  tendency  in  competi- 
tion is  to  follow  the  lower  standard  of  morality, 
whereas  progress  must  be  in  the  direction  of 
the  higher  standard. 

V — VOLITION 

Volition  is  the  motive  power  of  the  individual 
will — to  follow  co-operative  principles  through 
the  guidance  of  community  opinion.  Its  effect 
is  teamwork. 

(A)  TEAMWORK.   Here  is  where  the  results  Teamwork 
of  Association  education,  training  and  work 
prove  out.    If  the  individuals  all  reflect  com- 
munity opinion  in  their  voluntary  acts,  the 


TRADE     GO-OPERATION 

acme  of  co-operation  is  attained.  If  your  act 
co-ordinates  with  the  acts  of  the  other 
members  of  your  community  then  all  have 
attained  efficiency  in  teamwork. 
Conduct  (B)  CONDUCT.  Each  individual  in  Associ- 
ation work  is  alone  responsible  for  his  own  con- 
duct. There  can  be  no  coercive  measures  by 
majority  rule  or  otherwise  in  voluntary  co- 
operation, neither  can  resolutions  bind  mem- 
bers to  act  in  accordance  therewith.  The 
freedom  of  the  individual  to  act  as  his  desire 
dictates  is  paramount  in  co-operative  princi- 
ples as  well  as  in  the  eyes  of  the  law;  there- 
fore, the  conduct  of  the  individual  must  be  of 
his  own  volition  in  following  any  enactment 
of  his  association  as  well  as  in  observing  the 
principles  established  by  community  opinion. 
You,  as  an  individual,  are  then  an  essential 
part  of  the  machinery  of  your  organization, 
without  whose  effectiveness  the  other  parts  can- 
not operate  as  a  community.  Hence,  there  is 
the  responsibility  of  the  community  welfare 
upon  your  individual  conduct.  This  conduct 
of  the  individual  is  the  dominant  cause  for 
failure  or  success  in  any  co-operative  move- 
ment and  business  cannot  be  an  exception. 
Self-Control  (G)  SELF-CONTROL.  Self-control  means  the 
use  of  the  principles  of  co-operation  by  you. 


TRADE     CO-OPERATION 

If  you  do  not  keep  up  with  every  principle,  you 
become  a  drag  upon  your  community,  you 
lower  the  possible  standard.  It  will  unques- 
tionably require  sacrifice  of  personal  privilege 
and  private  advantage,  as  it  will  require  serv- 
ice of  an  earnest  character,  to  make  good  any 
community  purpose. 

Can  you  not  now  realize  what  is  dependent 
upon  your  self-control?  Without  it,  you  may 
not  act  and  teamwork  is  obstructed,  commu- 
nity opinion  is  violated,  harmony  is  disrupted, 
uniformity  is  disorganized,  comprehension  is 
nullified  and  good-fellowship  is  forsaken.  Co- 
operation absolutely  depends  upon  you  and  your 
self-control. 

THE  ARGUMENT 

The  Spirit  of  Democracy  is  the  Spirit  of  Spirit  of 
Go-operation.     Both  are  inspired  from  the  Democracy 
same  point  of  view  by  the  same  necessity,  and 
the  principles  governing  each  are  identical. 
In  a  democracy  it  is  public  opinion  which 
rules;    in   co-operation,  community  opinion. 
The  former  determines  public  welfare,  the 
latter  the  community  interest  of  the  trade. 

The  similarity  between  the  federal  prin- 
ciples of  our  country  and  the  co-operative 
principles  of  trade  is  striking  and  the  very 

[73] 


TRADE     GO-OPERATION 

arguments  of  constitutional  authorities  fit  per- 
fectly the  requirements  of  trade  co-operation. 
In  1805 — Thomas  Paine  wrote: 

Secrecy  and  It  is  by  keeping  a  country  well  informed 

Mystery  upon  its  affairs,  and  discarding  from  its  coun- 

cils everything  of  mystery,  that  harmony  is 
preserved  or  restored  among  the  people  and 
confidence  reposed  in  the  Government. 

Substitute  trade  community  for  the  word 
"country"  and  co-operation  for  the  word  "gov- 
ernment" and  we  can  adopt  the  truism  as 
exactly  applicable  to  trade  co-operation. 

A  century  later  (1916)  David  Jayne  Hill, 
an  eminent  authority  on  Constitutional  law, 
wrote  "The  Foundation  of  the  State"  (North 
American  Review),  and  his  analysis  furnishes 
exactly  the  basis  for  trade  co-operation: 

Self-  The  very  idea  of  government  implies  a  re- 

Renuncia-  straint  placed  upon  the  volitions  of  men, 

tion  which  are  of  necessity  not  only  different,  but 

conflicting.  The  true  secret  of  good  govern- 
ment lies  in  the  spirit  of  self-renunciation; 
and  the  word  "self-government,"  which  we 
are  proud  to  repeat  as  a  watchword,  has  no 
other  meaning.  It  signifies  government  by 
self-restraint,  as  distinguished  from  govern- 
ment under  compulsion.  A  people  that  is 
incapable  of  renouncing  personal  and  private 
advantage  in  the  interest  of  the  public  good 

[74] 


TRADE     CO-OPERATION 

is  incapable  of  self-government,   and  will 
sooner  or  later  seek  and  find  a  master.  *  *  * 

There  is  in  every  human  being  capable  of 
social  organization  a  conception  of  justice  as 
a  principle  wholly  apart  from  personal  de- 
sires or  volitions.  Attending  this  concep- 
tion there  is  a  sentiment  of  obligation  to 
respect  this  principle,  regardless  of  personal 
interest  or  advantage.  It  is  this  that  renders 
men  fitted  for  human  society,  and  makes 
possible  the  organization  of  the  State  as  the 
embodiment  of  public  authority.  The  State 
is  nothing  else  than  the  body  of  which  this 
principle  is  the  life. 

This  "self-renunciation"  which  causes  the  Self 
relinquishment  of  personal  and  private  ad-  ^enuncia- 
vantage  to  the  community  interest  is  obedience 
to   that   community  opinion  whose  voice  is 
the  voice  of  authority. 

Clearly  do  these  excerpts  interpret  the  ne- 
cessity for  a  comprehensive  intelligence,  upon 
which  the  stability  of  a  democracy  is  founded, 
and  which  also  must  be  the  foundation  for 
successful  trade  co-operation. 

A  trade  community  really  is  a  "little  de- 
mocracy" of  which  the  individual  is  a  citizen, 
and  to  whom  community  or  trade  opinion 
should  be  as  valid  a  guide  to  his  business  deal- 
ings as  public  opinion  is  the  valid  basis  for  the 

[75] 


TRADE     GO-OPERATION 

laws  which  are  made  to  govern  his  conduct  as 
a  citizen  of  a  democracy. 

Basis  for  In  a  democracy  there  must  be  harmonious 
Co-operatwn  frien(mness  to  insure  a  unity  of  knowledge  in 
the  affairs  of  state.  Does  not  the  same  neces- 
sity dictate  that  within  a  trade  community 
there  should  be  harmonious  friendliness— 
"good-fellowship" — amongst  its  members,  in 
order  that  there  should  exist  a  community 
knowledge  of  all  trade  matters? 

Competition  upon  the  present  basis  of 
aloofness,  selfishness  and  secrecy  is  a  process 
of  attrition  as  may  be  noted  by  the  constant 
elimination  of  old  business  houses.  Results 
from  such  "dog-eat-dog"  methods  as  are  illus- 
trated by  competition  are  obtained  only  when 
the  other  fellow  happens  to  be  the  "under  dog." 
As  intelligent  beings,  business  men  must  realize 
that  if  the  plane  of  competition  can  be  ele- 
vated to  meet  the  requirements  of  moral  law, 
the  standard  of  business  conduct  will  likewise 
be  higher,  producing  unquestionably  greater 
results. 

Intelligent  co-operation  means  a  high  stand- 
ard of  business,  with  efficiency  as  its  watch- 
word. A  low  standard  of  business  such  as 
competition  induces  implies  ignorance,  with 
chance  as  its  only  hope.  A  high  standard  of 


TRADE     CO-OPERATION 

both  morals  and  efficiency  creates  a  condition 
which  ignorance  cannot  attain. 

THE  FIRST  PRINCIPLE 

GOOD-FELLOWSHIP.    By  good-fellowship  is  Good~ 
implied  a  unity  of  friendliness,  which  is  the 
first  indispensable  condition  to  any  co-oper- 
ation. 

In  human  nature  the  inclination  to  friendly 
intercourse  is  inherent.  Give  this  inclination 
chance  to  develop  and  it  quickly  resolves  into 
good-fellowship.  And  if  there  be  a  common 
sentiment  directed  toward  any  purposes,  a 
unity  of  spirit  becomes  immediately  manifest. 
Even  between  seemingly  incompatible  natures 
there  will  grow  a  certain  sympathy  of  feeling 
when  a  necessity,  or  some  common  interest, 
inspires  a  joint  desire. 

To  make  effective  this  unity  of  purpose 
there  must  be  confidence,  and  to  insure  con- 
fidence, the  absence  of  all  mystery,  secrecy 
and  ignorance  of  motive  is  imperative.  And 
with  the  elimination  of  these  "unknown  quan- 
tities" will  quickly  follow  fair  dealing. 

It  is  evident  that  to  accomplish  this  neces- 
sary condition,  an  interchange  of  information 
forms  the  requisite  solution. 

It  should  be  unnecessary  to  observe  that 

[77] 


TRADE     GO-OPERATION 

it  is  only  the  competition  of  ignorance  which 
is  to  be  feared.  If  a  competitor  is  intelligent 
his  competition  is  "clean."  It  should  follow, 
then,  that  it  is  to  the  interest  of  all  concerned 
that  all  competitors  should  possess  as  nearly 
as  possible  an  equality  of  knowledge,  or  an 
equal  opportunity  to  acquire  it. 

Information  which  one  competitor  may 
possess,  which  others  do  not,  can  be  of  but  mo- 
mentary advantage,  for  when  others  do  dis- 
cover it  the  reaction,  which  inevitably  follows, 
often  results  in  the  loss  of  what  had  been  gained 
by  the  advantage.  A  selfish  advantage  is 
invariably  followed  by  reprisals  and  reprisal 
upon  reprisal  spells  ultimate  ruin. 
The  Open  "Shirtsleeve  diplomacy"  through  "the  open 
Door  door"  is  equally  a  wise  and  up-to-date  policy 
for  business.  Throw  open  the  doors,  let  in  the 
light  upon  all  transactions,  handle  the  truth 
with  shirtsleeve  frankness,  and  mutual  in- 
terests will  grow.  A  frank  exchange  of  infor- 
mation between  competitors  certainly  must 
increase  the  knowledge  of  both,  while  an  inter- 
change between  and  amongst  all  competitors 
unquestionably  will  result  in  the  growth  of 
the  trade  community,  in  knowledge,  in  op- 
portunity, in  economy,  in  efficiency  and  in 
scope. 

[78] 


TRADE     CO-OPERATION 

What  more  could  be  wished?  Is  this  not 
what  business  is  looking  for? 

The  interchange  of  information  should  in- 
clude everything  of  common  interest.  No 
secrets  in  trade,  would  mean  both  competence 
and  efficiency,  a  condition  which  would  ex- 
clude opportunity  for  "pirates"  to  undermine 
the  trade  stability  by  preying  upon  its  un- 
defended units. 

A  trade  placed  upon  such  a  basis  would  be 
invulnerable  because  it  would  be  wholly 
efficient. 

The  Federal  Trade  Commission  has  gath-  Present 
ered  data  in  shape  of  direct  information  per-  In*fficieTWy 
taining   to   manufacturing   industries   which 
reveals  an  astonishingly  deplorable  condition 
of  "hit  or  miss"  ignorance  in  the  simple  ele- 
ments which  go  to  make,  not  only  efficiency 
and  stability,  but  solvency.    It  serves  as  con- 
clusive proof  that  it  is  simply  the  lack  of 
uniform  knowledge  which  is  responsible  for 
the  condition. 

If  such  be  true  of  manufacturing  industries, 
it  is  sufficient  indication  to  prove  also  that  the 
conditions  in  the  miscellaneous  classes  of  busi- 
ness engaged  in  the  distributing  function  must 
be  infinitely  worse. 

The  interchange  of  information  is  that 

[79] 


TRADE     GO-OPERATION 

interchange  process  of  education  which  in  time  leads  to  the 
information  Po^nt  wnere  trade  units  recognize  that  their 
troubles  are  similar  and  their  interests  iden- 
tical. 

Most  all  problems  in  business  are  com- 
munity problems  and  it  is  evident  that  they 
can  only  be  solved  by  community  effort. 
Therefore,  just  so  long  as  the  units  of  a  com- 
munity waste  their  energy,  their  capital  and 
their  wits  in  the  scramble  of  competitive  at- 
trition, the  problems  cannot  be  solved  and 
inefficiency  must  continue  to  ruin  those  whose 
stock  of  these  attributes  is  insufficient  to  stand 
the  strain. 

It  is  the  interchange  of  information  which 
reciprocally  educates,  and  establishes  that  in- 
telligent understanding  which  is  necessary 
to  cope  with  the  constantly  increasing  prob- 
lems presented  to  the  trade  community  by 
the  unremitting  economic  law. 


THE  SECOND  PRINCIPLE 

Comprehen-  COMPREHENSION.  Comprehension  herein  is 
construed  to  mean  intelligent  understanding, 
the  absorption  of  definite  knowledge. 

It  is  only  when  facts  and  conditions  are 
intelligently   understood   that   the  problems 

[80] 


TRADE     GO-OPERATION 

confronting  the  20th  century  can  be  solved,  and 
this  equally  is  as  true  of  business  as  of  political 
problems.  The  solution  is  up  to  the  trade  com- 
munity upon  a  business  issue,  as  it  is  up  to 
the  people  upon  a  political  question. 

Not  to  impugn  the  mental  ability  of  busi-  Lack  of 
ness  men,  it  is  no  injustice  to  assert  that  it  is  Knowkd^e 
their  lack  of  proper  comprehension  of  economic 
fundamentals,  natural  laws,  which  occasions 
the  present  absurdity  of  competitive  strife, 
just  as  the  people's  lack  of  comprehension 
causes  them  to  indulge  in  false  political  theories. 

The  untrained  minds  of  business  men  cause 
them  to  differ  until  there  is  formed  a  state  of 
chronic  incongruity.  They  do  not  understand 
the  exact  conditions  in  business,  nor  each 
other's  motives,  consequently  there  is  the 
absence  of  a  seeming  possibility  for  unity  even 
while  their  interests  and  objects  are  identical. 
Hence,  in  the  absence  of  the  common  basis  of 
a  uniform  understanding,  it  is  perfectly  natural 
that  they  should  resort  to  competitive  contest 
in  accord  with  their  primal  instincts. 

Really,  it  is  to  the  lack  of  that  comprehen- 
sion (which  is  possible  for  every  man  to  ac- 
quire) that  almost  every  human  difficulty, 
disagreement  and  failure  may  be  attributed. 
Children  are  sent  to  school  to  learn  the  rudi- 
[81] 


TRADE     CO-OPERATION 

ments,  the  groundwork  of  knowledge,  yet 
their  elders,  owing  to  their  disregard  of  these 
very  rudiments  in  business,  indulge  in  what, 
to  the  children,  could  they  understand,  would 
seem  ridiculous.  Cause  and  effect  are  ignored 
and  motives  attributed,  which  have  no  place 
in  reality  whatsoever,  being  simply  the  result 
of  ignorance  or  of  a  suspicious  imagination. 
Men's  While  men's  characters  and  dispositions 
Characters  may  differ  widely?  all  j^  influenced  by  the 

same  righteous  principles,  known  as  ethics, 
which  are  established  by  moral  law.  But 
these  principles  they  cannot  apply  because 
their  minds  differ  too  in  ability  to  reason,  in 
clarity  of  purpose  and  in  understanding. 
Therefore,  they  do  not  comprehend  how  to 
identify  their  community  interest. 

When,  however,  good-fellowship,  mutual 
confidence  and  unity  of  purpose,  characterize 
a  body  of  business  men — when  they  exchange 
with  each  other  the  information  which  will 
upbuild  their  common  understanding  of  the 
common  interest — the  result  is  bound  to  create 
this  necessary  comprehension. 

Essentials  Without  the  ground  work  of  comprehension , 
it  would  be  idle  to  expect  results  from  co-oper- 
ation; but  with  its  acquirement,  the  mental 
process  of  every  mind  is  revealed,  the  false 

[82] 


TRADE     GO-OPERATION 

impressions  dispelled,  the  doors  of  business 
are  opened  to  the  light  of  intelligence  and 
righteous  ethics  applied. 

It  is  here,  too,  where  patience  is  an  essential 
part  of  the  education  of  the  brighter  minds, 
while  diligence  is  building  up  the  intelligence 
of  the  duller;  and  here  again  is  "bear  and  for- 
bear" essential  to  equalize  the  adjustment  of 
men's  characters,  mental  abilities  and  ex- 
pressed opinions. 

A  clear  comprehension,  therefore,  of  the 
principles  underlying  co-operation  must  lead 
unerringly  to  the  goal  desired  by  all — progress 
and  success. 


THE  THIRD  PRINCIPLE 

UNIFORMITY.    The  outcome  from  the  com-  Uniformity 
prehension  of  the  foregoing  principles  of  co- 
operation will  result  in  uniformity — the  con- 
dition for  proper  teamwork. 

Uniformity  is  specific  in  its  application, 
adapting  standards  to  common  use  in  the 
trade.  It  is  the  utilization  of  methods  and 
materials,  such  as  have  been  determined  as 
best  adapted  to  produce  the  results  desired. 
It  applies  the  education  gained  from  trade 
intercourse,  to  active  practice  in  matters  of 

[83] 


TRADE     CO-OPERATION 

Uniformity  trade  technic,  efficiency  and  economy.  It 
establishes  the  scientific  basis  for  business. 
The  secret  of  any  progress  in  American  busi- 
ness lies  in  its  universal  adoption  of  uniform 
standards. 

The  question  as  to  why  such  uniformity 
should  not  be  equally  as  efficient  if  applied 
to  business  morals,  principles  and  policies,  is 
strictly  in  order,  and  the  answer,  to  be  consist- 
ent, must  be  in  the  affirmative.  And,  when 
there  is  the  same  uniform  teamwork  in  the 
mental  and  moral  processes  of  business,  as 
there  may  be  in  its  practical  forms,  then  indeed 
will  the  purposes  of  co-operation  be  fulfilled. 

The  determination  of  this  uniformity,  as 
can  be  readily  surmised,  is  the  part  of  trade 
opinion.  After  good-fellowship  becomes  the 
rule  and  information  becomes  a  common  fund, 
then  is  it  possible  to  obtain  a  definite  trade 
opinion  because  the  community  interest  has 
been  made  the  working  hypothesis,  based  upon 
facts  as  revealed  by  comprehension. 

Argument  should  not  be  required  to  sustain 
the  desirability  of  uniformity  or  standardiza- 
tion, the  value  of  which  is  self-evident.  It  is 
a  principle  too  well  founded  and  demonstrated 
to  inspire  a  doubt.  The  only  question  is  as  to 
its  possible  effective  application  to  the  mental 

[84] 


TRADE   CO-OPERATION 

and  moral  process,  and  this  may  be  answered  Uniformity 
by  the  statement  made  in  the  preceding 
chapter  regarding  the  necessity  for  the 
groundwork  of  fundamentals  to  the  acquire- 
ment of  comprehension.  Uniformity  in 
business  must  follow  community  compre- 
hension as  the  one  possible  result. 

Unfortunately,  uniformity  of  opinion  is 
today  the  great  lack  in  business,  and  the  only 
possibility  for  progress  and  for  defense  lies  in 
the  force  of  which  it  alone  is  capable.  It  has 
been  said  that  "public  opinion  is  the  only 
enduring  force  in  the  world";  likewise  is  the 
uniformity  of  trade  opinion  the  only  enduring 
force  in  trade  as  it  constitutes  the  only 
authority  to  which  the  units  of  trade  owe 
allegiance. 

Until  this  uniformity  of  purpose  manifests 
itself  in  trade  opinion,  the  practical  uniformity, 
such  as  accounting,  cost  determination,  stand- 
ardization of  usages,  classification  of  competing 
articles  and  other  essentials  to  the  conduct  of 
efficient  business,  cannot  be  forthcoming. 


THE  FOURTH  PRINCIPLE 

HARMONY.    Harmony  is  that  ideal  condi-  Harmony 
tion  to  which  nature  and  man  are  both  work- 

[85] 


TRADE     CO-OPERATION 

Harmony  ing — nature  in  the  direction  of  perfection  and 
beauty,  man  in  the  direction  of  happiness  and 
truth.  This  may  be  hard  to  reconcile  with  the 
incessant  work,  worry  and  circumstance  of 
man's  existence,  but  the  fact  is  clearly  shown 
by  comparison  with  the  past  conditions  of 
mankind.  It  is  very  evident  also  from  the 
history  of  nature  that  harmony  is  the  ulti- 
mate purpose  of  her  process. 

Competition  is  the  antithesis  of  harmony, 
because  it  produces  friction,  and  while  rivalry 
to  excel  is  in  itself  an  element  in  the  happiness 
of  man,  the  vicious  function  of  strife  is  no  part 
of  it. 

The  result  from  co-operative  work  is  har- 
monious action,  general  in  its  ejFect.  It  pro- 
ceeds from  the  crystallization  of  trade  opin- 
ion— the  determination  of  the  community 
interest.  It  means  the  co-ordination  of  parts, 
the  movement  of  the  whole.  It  cannot  exist 
except  under  moral  influence,  as  it  is  applied 
ethics  which  determines  righteous  action.  It 
necessitates,  too,  mental  control  which  deter- 
mines correct  action;  and  it  implies  obedience 
to  natural  law — economics. 

Harmony  is  therefore  not  a  condition  pos- 
sible to  create,  except  through  progressive 
steps,  for  it  is  the  condition  of  that  "working 

[86] 


TRADE     CO-OPERATION 

order"  which  requires  that  the  team  be  in 
perfect  action,  the  gearing  in  perfect  align- 
ment, and  co-operative  principles  in  operation. 
It  is  not  a  working  tool,  as  with  the  former 
principles,  but  the  finished  product  of  their 
action. 

THE  FIFTH  PRINCIPLE 

VOLITION.  Much  could  be  written  of  this  Volition 
subject  as  it  covers  the  entire  scope  of  man's 
actions — his  reasons,  his  emotions,  his  aspir- 
ations, inspirations,  instincts — as  they  work 
upon  his  will.  It  is,  however,  not  within  the 
scope  of  this  work  to  undertake  to  dissect 
mentality  or  character  but  only  to  distinctly 
and  emphatically  place  the  responsibility  upon 
their  master's  use  of  them.  He  has  the  au- 
thority over  himself — his  responsibility.  As 
he  controls  himself,  denies  his  instincts,  follows 
his  reason  by  sacrifice  perhaps,  certainly  by 
service,  so  will  he  obtain  results.  His  con- 
duct must  determine  his  self-control,  the 
direction  of  his  will — his  volition. 

The  volition  of  the  individual  is  the  motive 
power  of  co-operative  principles.  Without  it, 
they  would  be  empty,  inactive,  impossible. 

Volition,  together  with  good-fellowship, 
with  which  it  joins  hands  to  complete  the 

[87] 


TRADE     CO-OPERATION 

Volition  circle  of  principles,  supplies  the  personality, 
the  humanizing  spirit,  in  co-operation. 

Volition  is  the  active  principle  to  team- 
work, and  as  teamwork  depends  upon  the 
co-ordination  of  individuals  actuated  by  voli- 
tion, it  is  the  vital  principle  in  co-operation. 


[88] 


PART  V 
COMMENTARY 


Meditating  upon  these  matters,  it  is  hard 
to  resist  the  persuasion  that  unless  capital,  i.  e., 
business,  can,  in  the  immediate  future,  generate 
an  intellectual  energy,  beyond  the  sphere  of  its 
specialized  calling,  very  much  in  excess  of  any 
intellectual  energy  of  which  it  has  hitherto 
given  promise,  and  unless  it  can  besides  rise  to 
an  appreciation  of  diverse  social  conditions, 
as  well  as  to  a  level  of  political  sagacity,  far 
higher  than  it  has  attained  within  recent  years,  its 
relative  power  in  the  community  must  decline. 
BROOKS  ADAMS:  "The  Theory  of  Social  Revolution." 

/  tell  you  the  tendency  toward  co-operation 
is  so  much  stronger  in  this  twentieth  century 
than  the  tendency  toward  competition,  that  co- 
operation will  exist  everywhere.  *  *  *  *  We 
have  an  irresistible  tendency  for  co-operation 
in  business  in  every  line  from  the  crossroads 
to  the  great  metropolis. 

Professor  VAN  HISE,  University  of  Wisconsin. 

We  must  recognize  the  probable  effect  of 
present-day  political  tendencies  upon  busi- 
ness, upon  property  and  upon  property  rights 
and  upon  the  course  of  industrial  and  commer- 
cial development.  I  believe  that  currents  are 
developing  today  that  may  quickly  become  irre- 
sistible forces,  and  that,  too,  forces  of  adversity 
and  ill-fortune,  if  their  dangers  are  not  compre- 
hended, their  direction  corrected,  and  their 
sources  controlled.  F.  A.  VANDERLIP. 

Preparation  to  meet  this  (international) 
competition  must  be  a  complex  operation,  but 
it  must  be  effected  upon  the  basis  of  certain 
general  principles,  and  conspicuous  and  essen- 
tial among  these  must  be  reckoned  that  of  do- 
mestic reciprocity  and  co-operation  between 
government  policy  and  private  initiative  and 
endeavor.  COL.  HARVEY  in  N.  A.  Review. 


THE  COMMENTARY 

Trade  Co-operation  means  nothing  more  Practical 
than  the  application  of  common  sense  to  a  Application 
business  proposition,  and  the  five  principles 
outlined  in  this  work  define  the  logical  lines 
of  endeavor  by  which  to  make  possible  its 
practical  application. 

It  is  perfectly  evident  that  co-operation 
necessitates  system,  which  is  impossible  under 
open  competitive  methods.  The  main  dif- 
ficulties lie  not  in  the  adoption  of  a  system  in 
accordance  with  co-operative  principles,  but 
in  the  breaking  down  of  the  accustomed  habits 
under  competition,  in  thought  as  well  as  in 
methods. 

To  correct  the  thought  there  must  be  dis- 
pelled that  misapprehension  which,  in  the 
ignorance  of  facts  and  where  interests  seem- 
ingly conflict,  is  prone  to  dwell  in  individual 
minds.  It  is  obvious  that  to  dispel  this  mis- 
apprehension will  require  enlightenment  in  a 
common  knowledge  of  conditions. 

The  chief  obstacle  confronting  the  correc-  Chief 
tion  of  competitive  methods  is  inherent  self-  Obstacle 
ishness,  which  is  the  chief  support  of  compet- 


TRADE     CO-OPERATION 

Chief  itive  strife.    A  course  of  rational  reasoning 

Obstacle  ghoiJd  reveai  that  wherever  selfishness  exists 

there  is  an  impossibility  either  of  an  equitable 

opportunity  or  of  an  equitable  enjoyment  of 

results. 

No  matter  how  bounteous  the  quantity 
of  an  object  may  be,  a  beast  in  his  nature  snarls 
to  keep  others  away  from  it,  and  in  the  fight 
which  results,  much  of  the  object  is  destroyed 
and  lost.  Among  men,  especially  in  civiliza- 
tion, the  enjoyment  of  anything  in  which  there 
is  a  recognized  community  of  interest  is  par- 
taken of  in  harmony  and  good-fellowship,  for 
then  each  is  assured  of  an  equitable  portion. 
Likewise  should  it  be  with  trade,  for  there  is 
ample  business  for  all,  and  if  the  community 
interest  is  observed  the  equity  in  its  division 
is  certain.  Without  the  observance  of  this 
community  interest  the  selfish  scramble  re- 
sulting means  an  inequitable  division  of 
portions  with  the  waste  of  a  substantial  part. 

Why  civilized  man  should  not  recognize 
the  error  of  competition,  as  it  now  exists,  and 
apply  the  obvious  correction  of  co-operation, 
as  he  has  done  in  every  other  phase  of  his 
political  and  social  life,  is  due  principally  to 
this  inherent  selfishness  which  lingers  in  his 
nature. 


TRADE     CO-OPERATION 

As  has  been  indicated,  co-operation  cannot 
eliminate  competition  entirely,  but  in  with- 
drawing the  selfish  thoughtlessness  and  mis- 
apprehension from  it,  its  unbridled  tendency 
to  destroy  is  curbed  and  a  basis  is  created  for 
clean  rivalry  in  efficiency. 

If  the  signs  of  the  times  are  read  correctly, 
proper  consideration  for  a  fellow-man  and  the 
acknowledgment  of  his  community  rights  are 
principles  which  hereafter  will  govern  hu- 
manity, and  business  must  undergo  the  change 
to  conform  to  these  principles. 

During  my  twenty  years  of  service  in  the  The 
councils  of  trade,  I  have  seen  an  old  generation 
pass  out  and  a  new  one  take  its  place.  I 
have  observed  during  this  period  a  gradual 
transition  from  acute  individualism  to  a 
semi-co-operative  condition,  induced  by 
increasing  necessity.  In  some  instances  the 
individuals  plainly  entered  in  the  community 
organization  with  an  illy -concealed  protest 
and  certainly  with  no  co-operative  spirit. 

Such  an  organization  cannot  be  called  co- 
operative for  it  lacks  the  zeal,  the  basic  knowl- 
edge, the  harmony  and  uniformity  which  are 
the  cardinal  necessities  of  true  co-operation. 

The  necessities  in  recent  years  have  been 
growing  more  and  more  evident  and  plainly 

[93] 


TRADE     CO-OPERATION 

call  for  closer  contact  between  members  of  a 
trade,  as  they  demand  amity,  unity  and  the 
determination  of  community  interest.  These 
necessities  are  created  by  economic,  political 
or  social  and  legal  conditions. 

Community  interest  has  become  insistent 
upon  being  recognized  and  in  a  short  time  must 
become  preponderant  in  the  consideration  of 
trade,  taking  precedence  before  all  individual 
interests. 

The  business  man's  hesitancy  today  in 
accepting  the  inevitable,  in  answer  to  the  call 
of  necessity,  to  perfect  his  trade  organization, 
is  due  partly  to  his  conservatism,  owing  to  his 
past  success,  partly  to  adherence  to  the  habits 
of  competition,  partly  to  skepticism,  but  prin- 
cipally to  his  ignorance  of  the  fundamental 
principles  of  co-operation,  a  proper  knowledge 
of  which  would  overcome  his  reluctance. 
The  Business  Taking  the  business  man  as  he  is,  he  is  a 
sort  of  a  "rough  diamond"  as  far  as  higher 
business  culture  goes.  To  use  F.  A.  Vanderlip's 
phrase,  he  is  an  "economic  illiterate,"  but 
as  he  has  not  heretofore  been  compelled  to 
polish  up  his  economic  knowledge,  nor  his 
ethical  attainments,  he  perhaps  must  be  for- 
given for  following  his  competitive  breeding. 

It  is  not  our  privilege  to  accord  to  the 

[94] 


TRADE     CO-OPERATION 

business  man  the  distinction  of  ' 'superman"-  The  Business 
he  is  but  plain  human,  even  as  his  ancestors 
were,  and  when  called  upon  to  perform  a 
necessary  duty,  which  in  view  of  past  expe- 
rience may  appear  to  him  as  superhuman,  he 
is  helplessly  puzzled. 

The  business  man  is  not  a  scientist  and  if 
he  be  a  philosopher  he  reasons  along  the  lines 
of  human  frailties  rather  than  about  the  moral 
possibilities  of  his  fellow  -  being.  He  calls 
science  "theory" — and  logic  he  dubs  "aca- 
demic stuff."  He  considers  the  rule-of-thumb 
as  "practical"  knowledge  and  he  is  tainted  with 
the  old,  old  habits,  formed  by  his  forbears 
generations  back,  which  he  has  inherited  to 
his  present  discomfiture.  He  is  a  victim  of 
conservatism,  a  slave  of  habit  and  a  follower 
of  circumstance.  He  progresses  by  dogged 
persistency  and  by  experiment,  rather  than 
by  applied  ability;  by  impulse  and  by  expe- 
diency, rather  than  by  judgment,  and  oft- 
times  by  luck  rather  than  by  design. 

The  business  man  carries  with  him  all  the 
youthful  characteristics  of  hopeful  develop- 
ment even  though,  at  times,  he  lapses  into 
boyish  thoughtlessness  or  mischief.  Like  any 
other  human  being  he  is  more  readily  suscep- 
tible to  the  will  power  of  a  dominating  mind 

[95] 


TRADE     GO-OPERATION 

The  Business  than  to  cold  argument ;  he  will  follow  a  leader 
Man  sometimes  without  discrimination.  He  is 
readily  swayed  by  eloquence  and  sometimes 
by  bombast.  In  brief,  he  is  human  and  there- 
fore uncertain.  Throw  into  the  balance  with 
these  attributes,  competition  with  all  that 
it  implies,  and  mental  incompatibility,  and 
some  realization  may  be  had  of  the  necessity 
for  careful  education  as  preliminary  to  real 
association  work. 

Fortunately,  he  is  amenable  to  the  resur- 
recting influence  of  reason,  that  is,  if  it  does 
not  too  abruptly  attack  his  interests,  and  if  it 
is  given  to  him  in  doses  not  over  vigorous. 
Once,  therefore,  get  him  into  the  habit  of 
"right"  thought  (even  though  he  backslides 
at  times  to  "meet  competition")  then  does  his 
real  progress  begin. 

Here,  then,  is  the  material  for  that  team- 
work which  the  age  demands. 

If  seemingly  not  promising,  we  must  con- 
sider that  we  have  two  great  influences  on  the 
proper  side  of  the  balance,  common  sense  and 
necessity,  and  if  we  can  engraft  them  suffi- 
ciently into  the  minds  of  our  business  men,  to 
convince  them,  we  may  be  assured  that  their 
education  will  be  rapid,  for  they  are,  after  all, 
the  keenest  of  all  human  classes. 

[96] 


TRADE     GO-OPERATION 

If  once  the  business  man  becomes  con- 
vinced of  the  great  advantage  that  harmonious 
teamwork  has  over  competitive  conflict  to 
produce  results,  and  when  he  absorbs  the  truth 
that  community  welfare  means  his  individual 
progress,  the  foundation  to  successful  co-oper- 
ation is  laid. 

Now  let  us  take  a  glance  at  the  economic  The 
conditions — the  stormy  sea  of  troubles  over 
which  the  ship  of  trade  is  sailing,  and  we  shall 
see  the  practical  necessity  for  co-operation. 

Up  to  twenty  or  twenty-five  years  ago, 
individual  merchants  had  ample  room  to  seek 
new  fields  of  opportunity,  but  with  the  devel- 
opment of  steam  and  electricity,  the  world 
gradually  contracted  into  a  smaller  sphere, 
and  the  scope  of  opportunity  likewise  became 
narrower. 

Means  of  communication  and  transporta- 
tion increased,  facilities  for  manufacturing 
multiplied,  the  appetites  of  the  people  for  lux- 
uries and  conveniences  developed  with  their 
increasing  wealth,  and  greater  service  was 
demanded. 

At  the  same  time  individual  shops  grew 
into  factories,  factories  into  corporations,  cor- 
porations into  combinations. 

[97] 


TRADE     CO-OPERATION 

The  Goods  became  standardized,  supply  an- 
ticipated  demand  so  that  speculative  oppor- 
tunity in  many  commodities  lessened.  Labor 
organized  and  demanded  a  larger  share  of  the 
profits.  Extensive  advertising,  intensive  sales- 
manship and  extravagant  service  stimulated 
the  demand  to  the  extreme.  The  wants  of  the 
people  continued  to  increase  until  they  re- 
belled at  the  cost  of  their  own  high  living  and 
then  sought  out  the  business  man  as  respon- 
sible. Politicians  caught  the  cue  and  howled 
at  the  robbing  business  man  and  laws  were 
enacted  to  restrain  him. 

To  do  business  and  make  money  under 
these  conditions  made  business  a  wasteful 
warfare.  Is  there  any  wonder  that  business 
is  floundering  about  in  its  endeavor  to  find 
a  firm  footing,  some  stable  condition  upon 
which  it  may  hold  its  own,  even  intruding  upon 
its  neighbor's  rights  in  the  wild  scramble  for 
survival?  Is  it  not  evident  that  the  individual 
must  be  lost  in  this  sea  of  troubles  unless  he 
save  himself  by  seeking  assistance  through 
mutual  helpfulness  in  co-operation? 

There  is  no  doubt  that  the  old  time  " trust" 
was  created  as  a  means  to  overcome  the  dis- 
asters of  internecine  competition.  The  idea  of 
a  combination  or  a  "community  of  interest," 

[98] 


TRADE     CO-OPERATION 

so  called,  with  force  behind  it,  was  a  shorter  The 
cut  to  the  object  than  of  voluntary  co-opera- 
tion  with  its  attendant  necessary  education. 

Such  combinations  were  iniquitous  but 
no  more  so  than  the  concentration  of  capital 
and  purchasing  power,  which,  with  govern- 
ment assistance  in  shape  of  the  parcel  post, 
are  destructive  of  legitimate  trade  functions, 
particularly  in  distribution.  Their  ability  to 
exist  and  succeed  is  due  to  their  efficiency, 
with  which  their  competing  lines  in  individual 
competition  cannot  possibly  cope. 

And  just  at  this  moment  the  world  war,  the 
war  of  democracy  and  co-operation  against 
autocracy  and  combination,  is  raging.  What- 
ever the  outcome,  there  will  be  a  new  world, 
with  new  conditions,  new  fields  of  opportuni- 
ties and  a  new  moral  code.  Business  can  never 
be  the  same  as  before  the  war.  It,  too,  must 
be  revised.  International  competition  in  busi- 
ness is  inevitable  and  its  effect  will  change 
the  competitive  conditions  within  the  Nation. 

Many  governments  will  assist  their  com- 
mercial interests,  making  their  co-operation 
mandatory,  while  in  America  co-operation 
must  be  voluntary.  It  is  up  to  the  American 
business  man,  with  his  power  of  initiative,  to 
show  that  he  can  so  co-operate,  for  competi- 

[99] 


TRADE     CO-OPERATION 

tion  will  exist  hereafter  between  co-operating 
bodies.  The  community  interest,  the  trade 
interest,  must  be  defined,  comprehended  and 
held  inviolate  if  the  American  business  man 
is  to  hold  his  own  in  the  coming  test  for  com- 
mercial supremacy. 

Political  In  the  coming  order  of  things  we  are  cer- 
Conditions  ^am  ^o  ke  confronted  by  the  growing  popular 
clamor  for  paternal  government — socialism. 
As  the  gap  widens  between  the  efficient  classes 
and  the  inefficient,  discontent  will  increase  the 
demand  for  government  control.  There  will 
be  a  revolution  of  sentiment,  seeking  to  change 
the  very  foundations  of  our  government.  The 
indication  can  be  had  by  analyzing  the  tend- 
ency of  labor  unionism  today,  a  constantly 
growing  power,  which  takes  no  cognizance  of 
competence  or  of  efficiency,  but  its  cry  is: 
the  fewest  hours,  at  the  greatest  wage,  for  the 
least  amount  of  labor.  Equality  is  forced, 
ability  has  no  preference,  and  this  legally 
recognized  combination  of  labor  compels  obe- 
dience to  its  decrees.  The  opportunity  for 
business  to  expand  and  develop  is  restricted, 
for  the  laws  prevent  trade  combinations.  As 
the  way  narrows  between  the  economic  neces- 
sity on  the  one  hand  and  legal  rights  on  the 

[100] 


TRADE     CO-OPERATIO^ 

other,    government   control   seems   the   only  Political 
possible  relief. 

State  legislatures  will  unquestionably  fol- 
low the  tendency,  so  it  appears  that  gradually 
all  public  utilities  eventually  will  be  doomed 
to  government  control. 

And  what  possible  defense  will  the  mem- 
bers of  a  trade,  dealing  in  a  staple  commodity, 
have  except  in  community  efficiency?  If 
divided  in  opinion  and  interest  and  subject 
to  competitive  conditions  they  will  be  deprived 
more  and  more  of  their  freedom  of  action — 
action  which  perhaps  economic  necessity  will 
demand.  We  have  already  tasted  of  this  legis- 
lative medicine  and  all  that  can  save  many 
industries  in  staple  commodities  in  the  future, 
from  a  still  more  bitter  and  perhaps  deadly  dose, 
will  be  the  force  of  their  unified  opinion  in  their 
trade  interest  and  their  community  efficiency. 

Seemingly  the  force  of  circumstance  impels 
business  men  to  co-operate  in  their  own  pro- 
tection, as  it  impelled  their  forbears,  the  cave 
men,  into  clans  for  mutual  protection,  and 
they  of  today  are  a  much  higher  order  of 
beings.  So,  when  analysis  points  to  greater 
protection  as  well  as  greater  results,  through 
co-operative  work,  surely  rational  men  should 
hesitate  no  longer. 

[101  1 


TR  A  DE     GO-OPERATION 

Legal  As  we  have  observed  elsewhere,  there  is 
Conditions  ft  wj(je  gap  between  the  constructive  economic 
development  and  the  conservatism  of  the  law. 
There  is  an  urgent  necessity  for  a  bridge  which 
will  bring  these  two  great  elements  in  national 
life  together. 

Unfortunately,  the  gap  is  maintained  by 
the  false  theories  which  an  uninformed  public 
creates  in  its  wild  clamor  for  a  correction  of  its 
social  difficulties.  These  theories  can  only  be 
offset  by  the  truth,  by  the  education  of  our 
lawmakers  in  economic  law,  and  by  the  en- 
lightenment of  both  lawmakers  and  adminis- 
trators to  the  fact  that  it  is  a  natural  impos- 
sibility to  either  alter  or  obstruct  an  economic 
law  by  statute,  without  creating  a  condition 
of  demoralization  which  aggravates  rather 
than  corrects  the  situation. 

Business  today  is  law-burdened.  A  super- 
fluity of  regulations  embarrass  its  natural 
course.  But  very  few  of  these  laws  are  truly 
beneficial,  amongst  which  the  Pure  Food  law 
stands  pre-eminent.  The  Sherman  Anti-trust 
Act  was  passed — a  righteous  law,  perhaps,  but 
unnecessary  because  the  common  law  ade- 
quately protects  against  the  very  iniquities 
which  this  law  was  aimed  to  prevent.  We  see 
a  mass  of  decisions  and  interpretations  which 

[101] 


TRADE     GO-OPERATION 

apply  without  discrimination,  harassing  the  Legal 
very  business  man  whom  the  law  was  intended  Condltlons 
to  protect.  When  his  embarrassment  became 
too  painfully  evident  through  the  decisions 
under  the  Sherman  Act,  we  find  other  laws 
passed  to  assuage  their  violence — the  Clayton 
law,  the  Federal  Commission  law,  and  the 
Webb  Export  law  for  instance — when  what 
is  really  needed  is  a  repeal  of  all  restrictive 
laws  with  a  court  of  commercial  equity  to 
decide  whether  or  not  an  act  of  business  is 
detrimental  to  public  welfare. 

We  observe  further  that  but  few  of  the 
technical  questions  get  to  the  Supreme  Court 
for  final  determination,  but  are  left  in  the  air 
in  the  district  and  circuit  courts.  We  observe 
that  even  conflicting  opinions  will  license  in 
one  part  of  the  Union  that  which  is  prohibited 
in  another.  We  observe  that  the  "Rule  of 
Reason"  is  given  to  the  courts  as  a  criterion 
for  their  decisions,  but  unfortunately  the  rule  of 
reason  seems  to  differ  in  the  mind  of  different 
courts.  We  observe  that  the  Department  of 
Justice,  upon  its  own  initiative  and  without 
court  decisions,  brings  suits  and  obtains  "con- 
sent decrees"  from  the  poor  business  man 
to  force  its  own  opinions.  We  have  observed 
that  our  greatest  industry,  the  railroads,  was 


TRADE     CO-OPERATION 

Legal  taken  over  by  the  Government  under  the  stress 
Conditions  of  war?  because  the  Interstate  Commerce  Com- 
mission decided  that  either  the  railroads  must 
be  relieved  of  the  stringent  laws,  fail  under  the 
handicap,  or  that  the  Government  (against 
which  the  laws  do  not  prevail)  must  control 
them. 

Most  all  onerous  and  restrictive  laws  are 
based  upon  the  false  premise  of  the  necessity 
for  the  ' 'freedom  of  competition,"  which  is  a 
fetish  with  the  public  and  politicians.  As  has 
been  shown,  this  freedom,  the  unbridled  ten- 
dency of  competition,  leads  directly  to  destruc- 
tion and  it  must  be  modified,  not  by  laws  but 
by  economic  requirements.  The  law  in  equity 
alone  should  interfere  where  some  such  modi- 
fication may  be  proven  injurious  to  public 
welfare. 

An  eminent  authority,  former  Justice 
Hughes,  in  January,  1917,  in  an  address  given 
before  the  New  York  bar,  said: 

"I  hope  that  the  days  devoted  to  the  appli- 
cation of  the  uncertainties  of  such  statutes  as 
the  Sherman  Act  are  numbered.  What  an  ab- 
surdity it  is  to  find  that  the  very  co-operation 
which  the  Nation  finds  necessary  for  its  own 
economic  salvation  under  the  strain  of  war  is 
denounced  as  a  crime  in  times  of  peace!" 


TRADE     CO-OPERATION 

How  is  the  correction  of  these  legal  incon- 
gruities to  come  about  unless  the  unified 
opinion  of  business  can  be  used  in  protest,  and 
how  is  it  possible  to  obtain  such  opinion 
except  through  co-operation  ? 

It  is  not  that  these  laws  directly  affect  true 
co-operation  which  does  not  violate  them  in 
fact  or  tendency,  as  the  act  of  any  individual 
is  of  his  own  volition,  but  they  do  cast  a  shadow 
over  the  liberty  of  business  by  following  it  with 
harassing  threats  of  penalty  or  imprisonment 
if  it  fail  to  keep  within  certain  confines  as  deter- 
mined by  the  opinions  and  interpretations 
under  the  law. 

Such  laws  are  irritating  and  undemocratic, 
so,  as  former  Justice  Hughes  further  said  in 
the  address  above  referred  to,  "Let  our  legis- 
lators free  our  statute  books  of  cant." 


In  this  brief  commentary  upon  the  condi-  Conclusion 
tions  influencing  business,  I  have  been  careful 
not  to  overdraw  the  situation.  In  fact,  perhaps 
I  have  rather  minimized  the  dangers,  problems 
and  necessities  confronting  trade,  but  knowing 
that  but  few  business  men  have  seriously  con- 
sidered the  effect  of  the  tendencies  upon  their 
business  prospects,  I  have  thought  best  simply 
to  place  before  them  a  conservative  statement, 


TRADE     GO-OPERATION 

Conclusion  content  to  know  that  if  they  do  investigate  the 
facts  their  efforts  will  readily  confirm  my  views 
and  they  will  not  accuse  me  of  overdrawing 
the  situation. 

And  now  in  conclusion — you  have  been 
introduced  to  the  subject  of  co-operation  as  it 
should  be  understood  by  all  business  men. 
The  result,  if  my  hope  is  fulfilled,  is  that  you 
will  consider  earnestly  this  new  phase  in  your 
business  career; — that  you  will  now  be  willing 
to  yield  a  portion  of  your  individual  sovereign 
rights  in  order  to  constitute  the  community 
interest — that  your  individual  business  will  be 
looked  upon  by  you  as  a  department — one  unit 
of  the  community  whole — with  you  as  its  man- 
ager, responsible  for  your  part  in  the  com- 
munity welfare; — that  you  will  hereafter  reg- 
ulate your  actions  to  accord  with  community 
opinion,  the  highest  authority  in  co-operative 
unity ; — that  you  and  your  fellow  members  will 
look  upon  each  other,  no  longer  as  competitors 
in  the  old  sense  of  the  word,  but  as  co-oper- 
ators;— that  your  co-operator  is  not  one  to 
down,  but  to  uplift,  to  aid,  and  from  whom  to 
receive  aid; — that  your  competition  hereafter 
will  strictly  be  a  good  natured  rivalry  to  obtain 
the  result  of  efficiency  or  of  economy  with  price 
balanced  with  service ; — that  you  will  meet  the 

[106] 


TRADE     CO-OPERATION 

heads  of  other  departments  of  the  trade  com-  Conclusion 
munity  frequently,  exchange  with  them  views, 
experiences  and  facts; — that  you  will  yield  to 
a  preponderant  opinion  against  you,  remem- 
bering that  the  progress  of  the  whole  will  yield 
better  results  for  you  than  anything  you  may 
obtain  by  independent  action,  and  finally; — 
that  you  will  follow  the  essential  principles  of 
co-operation,  particularly  in  exercising  con- 
trol over  yourself  and  your  action,  so  as  to 
perform  properly  your  part  in  the  teamwork. 
If  you  do  this,  I  am  confidently  certain  that 
the  results  of  your  organization,  of  your  edu- 
cation, of  your  co-operation  will  produce  for 
you  and  for  your  community  the  success,  prog- 
ress and  prosperity  which  such  loyalty  and 
teamwork  must  merit,  and  which  it  is  unques- 
tionably certain  to  achieve. 


PRESS  OF  H.  S.  CROCKER  Co.  ,SAN  FRANCISCO 


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